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TaxRobin
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Experience:  International tax
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I have a house which was my main residence for 7 years until

Resolved Question:

I have a house which was my main residence for 7 years until 2005 when I left it to become a carer. The house was rented out from that point onwards to provide an income. How do I minimise CGT on the property when I sell it. I may be able to return to live in that property at that point in time.
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.

When you sell or dispose of your own home you won't have to pay any Capital Gains Tax if you satisfy two conditions. For the whole time you've owned it both the following must apply:

  • it's been your only home or main residence
  • you have used it as your home and nothing else

You might not get the full amount of relief because you have let your home. The final 18 months that you own it will be treated as if you lived there, even if you didn't. The property must have been your only or main home at some time during the time that you owned it.

You are going to need to proarte between the gain on the time it was your main home and the time you used it for letting.

You may get another relief known as 'Letting Relief'.

The maximum amount of Letting Relief due is the lower of:

  • £40,000
  • the amount of Private Residence Relief due
  • the amount of gain you've made on the let part of the property

You will need to work out your gain before you can see how much CGT you would be liable for.

http://www.hmrc.gov.uk/cgt/property/calc-cgt.htm

Customer: replied 2 years ago.

HI,

1 subsidiary questions: Are there any other qualifying criteria for letting relief ? I can't find any on the HMRC website.

Expert:  TaxRobin replied 2 years ago.
Hello,
HMRC has numerous info on this subject:
http://www.hmrc.gov.uk/manuals/cgmanual/CG64710.htm
That page will allow you access to all the info. Just click on next page at the bottom when you access the above.
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