Archived News May, 2011

Tax expert Carmarthenshire Journal 18th May 2011

I inherited a property several years ago from my late mother and I have rented it out since. The tenant would like to buy the property from me and I am happy to sell it now. Will I have to pay any tax on the sale?

The answer to your question will depend on whether the property has increased in value since your mother passed away. If it has increased in value by more than £10,600 (and you have not spend any money improving the property) you could pay capital gains tax at a rate of either 18% or 28%, depending on whether you are a basic or higher rate tax payer. There are tax planning opportunities to possibly reduce this liability but you would need further professional advice.

This year I’m expecting to make a loss on my business mainly due to a couple of bad debts and some high value items I have bought. Will this affect my tax credits claim and can my husband use my loss for tax purposes?

The loss for the year can be used differently for income tax and tax credit purposes. Your tax loss can be utilised against your own profits of this year, last or future years. However, as tax credits are based on the household income, your loss can reduce your joint income and therefore increase your claim for tax credits.

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