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TonyTax
TonyTax, Tax Consultant
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I sold a property 12 months ago, whilst also owning another

Resolved Question:

I sold a property 12 months ago, whilst also owning another property which I bought ahead of selling the first one. I have done this before and remember that there is a time period before which I would need to pay capital gains on the equity I had in the first property. Is this true, or would capital gains be payable immediately on the equity from the first property if it is not re-invested immediately
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

If the property that you sold was your main home for the entire period of ownership and you sold it when you moved out or you sold it within 36 months of moving out, then any gain you make will be exempt from Capital Gains Tax. Take a look here for information on the main residence and CGT.

Whether you buy another property to live in or not is not relevant. The period of grace that you have to sell a property after you move out of it was reduced to 18 months with effect from 6 April 2014.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Thanks. That is useful. My circumstances are a little complicated. Having read the HMRC link, Let me explain to be sure none of this makes any difference.


 


The property was my main home, except for the fact that from 2010-2012 I was not living there as I was living abroad for work purposes. I then moved back, and after 6 months bought a new property with my partner. Only 6 months after this - in mid 2013, did I sell the previous property (this would be 10 months after moving back to the UK.


 


I still have the cash / gain / equity from this sale sitting in my bank account - 12 months on... So does it remain free from CGT?


 


Lloyd


 


 

Expert:  TonyTax replied 3 years ago.
Can you tell me the exact period you were working abroad please. Were you sent there by your employer at the time? When in 2013 exactly did you sell the property?
Customer: replied 3 years ago.

Yep. For sure.


 


I was moved by my employer from our UK to our US office in October 2010 and stayed until September 2012, when I returned to the UK office (all with the same company). The property in question was empty during this period.


 


I moved into the new UK property in Dec 2012.


My "old" UK property was sold on 1 July 2013.


 


Hope this helps.


 


Lloyd

Expert:  TonyTax replied 3 years ago.
You qualify for exemption from CGT for that part of the gain covered by your period working abroad so long as you did not buy another property which could qualify for main residence relief and you took up residence in the UK property at some point after your return to the UK.

If you didn't take up residence again before you sold the property, you are covered by the last 36 months of ownership relief after having moved out. You sold the property in July 2013 and 36 months back from then is 2 July 2010.
Customer: replied 3 years ago.

Thanks. So essentially I am covered either way?


 


 

Expert:  TonyTax replied 3 years ago.
Yes, you are.
Customer: replied 3 years ago.

Great - thanks for your help. Much appreciated.


 


Lloyd

Expert:  TonyTax replied 3 years ago.
Thanks.
TonyTax and other Tax Specialists are ready to help you
Expert:  TonyTax replied 3 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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