Capital Gain on sale of property

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This discussion clarifies how to calculate capital gains tax when selling a property. The seller booked a flat in 2010 and received possession in 2015. The buyer is paying £40L, which includes arrears of maintenance fees and transfer costs (£3L). The advice given is that the capital gain should be calculated on the net selling price of £37L (£40L minus the £3L in costs), and it's recommended the seller receives this net amount directly, with the buyer handling the additional costs separately.

Deepak

Deepak (Querist)

21 March 2021 I have one residential flat booked in year 2010 and possession received in Dec 2015 @ 30L. At present I have to pay arrears of maintenance fee for two and half years and transfer cost for sale of flat, say 3L. Purchaser has agreed to pay 40L (includes maintenance fee + transfer cost include sale price). Now what will be my selling price of flat (a) 37L [40-3] or (b) 40L. Please advice. capital gain will be calculated out of 40L or 37L.
Thanking you in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

22 March 2021 Capital gain will be calculated out of 37L.

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)

22 March 2021 It is advisable for you to receive Rs. 37 lakhs (sales consideration) and let the buyer bear directly the upfront maintenance cost and transfer cost of the flat.

Deepak

Deepak (Querist)

23 March 2021 Thanks for valuable advise

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