ColinH55 Posted January 5, 2014 Report Share Posted January 5, 2014 We bought a flat off-plan. The purchase price was £225000 and that is the price recorded at the Land Registry but we received a discount of £23000 from the developer so we actually only paid £202000. We are now selling. For the CGT calculation should we use £225000 or £202000 as the purchase price? Link to comment Share on other sites More sharing options...
Dave A Posted January 6, 2014 Report Share Posted January 6, 2014 I'm no expert, but it seems obvious. The price you paid, you will have plenty of paperwork to demonstrate to HMRC what that was regardless of land registry entry. Dave Link to comment Share on other sites More sharing options...
Mortitia Posted January 6, 2014 Report Share Posted January 6, 2014 Surely it has to be the amount you actually paid. A quick check at www.landregistry.gov.uk will confirm it for you - there is a small charge though. Link to comment Share on other sites More sharing options...
Melboy Posted January 6, 2014 Report Share Posted January 6, 2014 The price you paid is the figure to use and that will be backed up with your final Solicitor's invoice. Your developer has entered the figure to LR as a bit of creative accounting I would bet. Link to comment Share on other sites More sharing options...
Richlist Posted January 6, 2014 Report Share Posted January 6, 2014 Well just to rock the boat a little.......I believe the figure to use is more likely to be the actual market value at the time of purchase ie £225,000. Link to comment Share on other sites More sharing options...
Dave A Posted January 6, 2014 Report Share Posted January 6, 2014 Capital gains is paid on profit. The price you get, less the price you paid less allowable deductions. Dave Link to comment Share on other sites More sharing options...
Melboy Posted January 6, 2014 Report Share Posted January 6, 2014 Well just to rock the boat a little.......I believe the figure to use is more likely to be the actual market value at the time of purchase ie £225,000. Go on then RL Explain your reason for this please? Joint couples capital gains exemption is circa. £18,000 ( can't remember precisely without looking it up) before the 40% tax on every pound kicks-in and that is only after all allowances have been taken into account. Link to comment Share on other sites More sharing options...
Richlist Posted January 6, 2014 Report Share Posted January 6, 2014 Well I based my 'GUESS' on the fact that other taxes are based on market value not prices paid eg...SDLT (stamp duty land tax) & inheritance tax are two examples. CGT allowances from April 2013 are £10,900 per person.....£11,000 from April 2014 & £11,100 from April 2015 and taxed at 18% or 28% depending on tax bands. Link to comment Share on other sites More sharing options...
Carryon Regardless Posted January 6, 2014 Report Share Posted January 6, 2014 If market value isn't the price paid then who decides and how is the market value decided ? In this case I would be tempted to declare the LR stated price "as I have no other records available sir". My expectation would be for Mr Taxman to use the LR for confirmation, where else could he look ? Link to comment Share on other sites More sharing options...
Melboy Posted January 6, 2014 Report Share Posted January 6, 2014 As I understood it the buyer's Solicitor informs LR and HMRC of the price actually paid for land or property. There must be more to this 23k "Discount" then we are all aware of. Link to comment Share on other sites More sharing options...
Richlist Posted January 6, 2014 Report Share Posted January 6, 2014 I believe Land Registry & SDLT are linked. There have to be safeguards in place otherwise buyers would evade paying the taxes. Example......If you sold one of your properties to a family member for 50% of its market value, the family member would still pay stamp duty on the full market value of the property. Link to comment Share on other sites More sharing options...
Melboy Posted January 6, 2014 Report Share Posted January 6, 2014 I believe Land Registry & SDLT are linked. There have to be safeguards in place otherwise buyers would evade paying the taxes. Example......If you sold one of your properties to a family member for 50% of its market value, the family member would still pay stamp duty on the full market value of the property. Aaaah! Now I know something about this because a few years back I tried to do this and I was told by the solicitor dealing with it that I couldn't sell to a family member below market price anyway. Link to comment Share on other sites More sharing options...
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