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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am in the process of buying a house with my partner (as ‘joint

Resolved Question:

I am in the process of buying a house with my partner (as ‘joint tenants’) - this will be our main private residence - we'll have a mortgage on it.
I am also in the process of selling my current main private residence (there is no mortgage on this property) - will my property qualifies as a principal private residence for capital gains tax? If so, the relief lasts how long? (i.e. within how many months I need to sell my property to quality for capital tax waiver). Note that I am planning to use this money to partially pay-off/off-set my new property's mortgage.
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.

Hi

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

You will remain as qualifying for private residence relief on the original property for up to 18 months after you have moved out - after this capital gains are considered.

But even then you remain due consideration for private residence relief for the time you lived there AND those last 18 months of ownership - plus the first £11,000 of any gain is exempt as this is your annual exemption allowance, so unless the property has a huge increase in value - then you will have a little longer bnefore capital gains tax arises!

This law on your original property exists along with the fact you will be making a new purchase (and so private residence releif will apply on that new purchae from the date you move in as well ) and regardless of what you might be using the profit from the original sale for - as this is your money (after capital gains have been considered) to do what you wish with.

So if you sell within 18 months of moving out - no capital gains at all.

Let me know if you have any furtehr questions or would like me to expand on any element of my response

Thanks

Sam

Customer: replied 2 years ago.

Thank you Sam.
If I buy the new property by myself and my spouse helps out on the
deposit side - will that trigger capital gains tax or inheritance tax.

Expert:  Sam replied 2 years ago.

Hi

Thanks for your further question - as this is a new topic it should really be listed as a new question - but as this is your first time usuing Just Answer, I will answer within the remit o the payment made for this original question.

No it will not - as the new property will be in your sole name - and if it rmeins your main residence for life - then any profits covered entirely by private residence releif and if you pass away - then as your spouse - no INheritance tax arises or is considered on assets or estate left to spouses.

I hope that helps, - please do take the time to rate (or press accept) the answer, as this ensures I am credited for my time

Thanks

Sam

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