How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13914
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

I have owned 2 properties last 7 years now. If I sell

Resolved Question:

I have owned 2 properties for the last 7 years now. If I sell the house that I have lived in and move into the other as my home for a period of 12 months or more, will there be any capital gains tax liability when I come to sell this? And would this change if, on the sale of the first property, I then purchased an investment property to let?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question - I am Sam - welcome to Just Answer.
I am afraid as the second property to date - has not been your main residence for the period of ownership to date, that the capital gain position has already been created.
The only change you will make by moving into this property - is
1) create an exemption under the private residence relief rules, the the time that you actually now live there for (as long as all aspects of your life were moved to this address) and
2) If you had previously rented out this property and declared all rents to HMRC, would attract private lettings relief, which can allow up to a further £40,000 exemption on the gain.
Whether you then used the sale proceeds to purchase an investment property to let - would have no bearing on this position.
Let me know if you require any further assistance with this matter.
Thanks
Sam
Customer: replied 2 years ago.
Hi Sam thanks for your response. So just to be clear, If I sell the property that is currently my home, there is no tax liability? But if I then move into my other property and make that my home, a liability will arise when I sell that, even though it will then be my only property?
Or is there only a liability because of the fact that I have 2 properties currently? In which case, it could make sense for me to move into my second property now (as this is the one that has made a substantial gain) to make that my home, and sell my existing property (on which there wil be very little gain)!
Jon
Expert:  Sam replied 2 years ago.
Hi Jon
Thanks for your response
Yes - you have it to a tee !
And no it has nothing to do with the fact that you have two properties currently - its to do with the fact that this particular property has never been your main residence until the move you plan to make now - so this in itself creates a capital gain position (so even if this was the only property you have ever owned - this position would still exist)
If there was any way to better your situation, I assure you I would offer it up to you - so you could minimise your tax exposure, but I am afraid there is not.
Let me know if I can assist any further - however it would be very much appreciated if you could, in the meantime, rate the level of service I have provided (or click accept) so I get credit from Just Answer for my time.
Thanks
Sam
Sam and other Tax Specialists are ready to help you