Hello and welcome to the site. Thank you for your question.Please advise -- how long have you owned each property?- can you make the second home your main property if that would mean mitigating CGT.- what is the paper gain on this property at present (current valuation less original cost price)Many thanks
Jannice, thank you for your reply and for additional information.As far as house No. 2 is concerned, you state you have owned it since 1968. Please advise if this property was your main residence up to 1992 when you moved to the property that you call your main residence now. Did you notify HMRC of your choice to make what you say your first property as your main residence?
Would you know/can you ascertain what house No. 2 was valued at in Mar 1982? Did you have any other property during the period 1968-1992?
Did you let house No 2 at any time whilst it was your main residence?
You say you could move back to House No 2 and make it your main residence again for the next few years. Is it between 5-10 years?
I await further news.
In 1968 we owned one property. We bought our second property as a second home and it has remained as this ever since. Our main residence and first home was bought in 1962 . We sold this and moved in 1992 and it has remained as our main residence since then. We have never notified the HMRC of any change in our main residence (except in 1992 when we moved house.).
NO. 2 house has never been our main residence. From 1968 -1992 we had two properties.
We know that the no.2 house will generate a higher capital gain than No. 1.and suspect that there could be finacial advantages in changing our main residence to No. 2. We don't know the rules which would apply to this. ?Qualifying period for living in new main residence.
My husband is well into retirement and we could be forced by lack of abitlity to cope with two houses to sell No. 2 within a year or two - this is a difficult one to judge. When you say 'Is it between 5-10 years' I think the answer to this is that we shall have sold the no. 2 house well before 5 years.
Jannice, thank you for your reply.Please correct my understanding from your last posting.You bought a house in 1962 and it remained your main residence until 1992 when you sold it and bought another property. This replacement property then became your main residence and still is.
House No.2 bought in 1968 has never been your main residence and always been a second home albeit you spend certain days a week in that property, the whole gain would be chargeable to capital gains tax, I'm afraid..As the property was bought in 1968 for CGT purposes you use market value at 31 Mar 1982 and not price paid in 1968 as your cost price. This would reduce the gain.More information on market value can be found here
Moving to the property even for 5 years would reduce your chargeable gain somewhat and CGT payable because 5 out of the total number of years since 1982 and not 1968 would be covered by private residence relief. In addition you would get additional 18 months relief. You should give due consideration to this prospect.
I hope this is helpful and answers your question.
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