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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15747
Experience:  International tax
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I live in a rented house as I need to live near my work as

Customer Question

I live in a rented house as I need to live near my work as a farmer. My own house which I have owned is rented out. Recently my Mother in law died leaving us a 50% stake in her house. We would like to sell our own house to buy her house, would we be liable gains taxon the sale of our house?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
and thank you me to assist you.
If you had lived in the property you want to sell whole of the time you owned it, there would be no CGT because of “private residence relief”.
Because you let the property, only part of the gain will be tax free.
You take the amount you sell the property then deduct the amount you bought it for. This is your gain.
Then you add the number of months you lived in the property to 18 and divide by the number of months you owned the property and this the portion of the gain that you would pay CGT on. It's the fraction of the gain that is tax-free.
You may be able to qualify ’s called “lettings relief” which makes up to £40,000 of your taxable gain tax-free. But if you use residence relief this is limited.
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Thank you, ***** ***** helpful but not the answer I wanted to hear! Any idea how much I would have to pay? I bought the house 25years ago £33000 and I guess it would now fetch about £180000. As I have always had a tied cottage as part of my work I have never needed to live in the house. I remember hearing once that if you lived in a tied cottage or rented accommodation you could claim your own property as your main residence. Obviously this has changed.

Thanks again

Chris

Expert:  TaxRobin replied 2 years ago.
Chris,
No one wants to hear that they may owe tax.
That may be but you still used the property purposes. You cannot escape that fact that the letting meant you were not using the full house or property as your residence.