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I am deciding to sell my property so stuck in a dilemma.
The property consists of 3 flats. 1 is mine as freeholder 2 are on long lease. And there is a shop in the front on Gr fl.
Recently due to mainly money issues I decided to sell the whole property.
When I called in agents for valuations. One of whom was a commercial agent, he called me after valuing. He said for the time being I only have a value for the shop as a commercial agent, I can understand that.
Now if I sell just the shop for now will give me much needed money.
My query is if I just sell the shop(Say it is 25% of the current market value) but less then the original price I bought it for.
For now how will this affect the CGT.
Will I have to pay any CGT now if the selling price will be lower than the actual price. If yes how much will it be?
Yes you are subject to CGT based in the part disposal rules which seek to apportion your costs on the one asset to the part disposed based on market values
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
So how will the CGT be calculated, if the bought value is lower than the price against to be paid now for part disposal. So as an example if the property was bought for £250k and now it is worth £300k but I am only going to sell part of it at £100k. If I am correct in thinking if I sold all of it I would have to pay CGT on the difference £300k - £250k = £50k. So I know I will have to pay CGT on the £50k - the allowances.
In this scenario the part disposal is going to be -£150.
Is there a link I can read up and see the calculations.
Thanks in advance.
The principle is that is you sold everything then you would be able to use the entire cost but in this case you need to apportion the position. CGT can get fairly involved depending on the circumstances (particularly where reliefs are concerned) so I am reluctant to summarise. However if you google part disposal then I am sure something will come up.
I think I got part of it.
as an eg.
If I sell 25% of the property off then I need to take out 25% of the price I bought it at. 25% of £250k = £62.5k so if do part dispose £100k I will be calculating CGT on £37.5k.
You need to speak with a properly qualified and specialist property accountant.
Less Tax For Landlords
0203 735 2940
You have the right principle but not the right calculation - its not that simple. Follow Tony's advice and take some advice from a chartered accountant.