2007-02-22 22:22:05 · 5 answers · asked by ria.2@btinternet.com 1 in Business & Finance ➔ Taxes ➔ United Kingdom
CGT will only arise when you sell the house, but not if the house has been your only or main residence from the date of Probate until you sell. In that case, there would be no CGT.
CGT will be chargeable on the increase in value between the Probate value and the selling price, so if you sold for £200,000 and the Probate value was £175,000, your taxable gain would be £25,000. However there are reliefs and exemptions which are uprated annually in the Budget. You can either go into your Tax Office and get someone to explain it to you, or get one-off help form an accountant if you are not sure.
2007-02-22 22:42:02 · answer #1 · answered by fengirl2 7 · 2⤊ 0⤋
In addition to fengirl's answer, I would add that the tax rate is tied to your regular income tax rate. You do not pay 40% on the whole gain. If you have some of your basic rate band left, you pay tax at 20%.
Edit: To the poster below, I am well aware that CGT is different to income tax. However, the rate of CGT that anyone pays is tied to their income tax rate. it used to be a flat rate of 30% but is now taxed at either 20% or 40%. See the link below.
2007-02-22 23:12:45 · answer #2 · answered by skip 6 · 0⤊ 0⤋
Skip is wrong I am afraid - Capital gains tax (CGT) is separate from normal income tax and is charged on any gain above £8800 (this year). However, only on your house if it is not your main residence. If it is, no CGT is applicable.
2007-02-23 03:46:28 · answer #3 · answered by Anonymous · 0⤊ 0⤋
40% after allowances - but you can roll the allowances over from year to year. If in doubt get professional advice first.
2007-02-22 22:42:43 · answer #4 · answered by Anonymous · 0⤊ 1⤋
40% of profit after allowances.
2007-02-22 22:25:29 · answer #5 · answered by Anonymous · 0⤊ 1⤋