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Hi - I am asking on behalf of another person, Chris, so I don't know, but I can ask Chris. It may be that the family preferred their original home and moved back. Let me know why you are asking the question - I can get back to Chris and ask
Hi - As I thought - the family moved back to their original home because they preferred their original home.
Hi - is it possible to email me a quick answer and then follow it up with your draft. Does CGT apply under the circumstances?
Hi again.I'm assuming that the second property and its land does not cover more than half a hectare.From the point at which you have more than one property available to you to live in, you have two years to make an election for one of the properties to be treated as your main residence to avoid having the decision made for you, based on the facts. You could make such an election but it will only cover the period from August 2013 to April 2014.From May 2014, the second property was let so you ceased to have more than property available to you to live in. Such an election will expose part of any gain you may make on a futre disposal of the first property to CGT. So long as you sell the second property within 18 months of moving out, you will escape CGT on the whole gain.You could choose not to make the election as you lived in the property for 8 months and, I assume, you moved your life there. I also assume that you did not move there to make a quick profit as if you did, HMRC could try to claim that it was never your intention to make the second property your medium to long term home and to seek to tax the gain. If no election was made and HMRc did not enquire into your case, then so long as you sell within 18 months of moving out, you will escape CGT on the whole gain. The fact that you changed your mind because you preferred your old home should not stand against you.On balance, you will probably be better off making the election for the second property to be treated as your main home, albeit only for 8 months so that HMRC cannot intervene. However, I have heard of cases where they have tried to intervene where the property that the election is being made for was up for sale.Take a look here, here, here and here for more information on the main residence and CGT.I hope this helps but let me know if you have any further questions.
Hi just a quick follow up - If no election was made and HMRc DID enquire into my case, the second home sold within 18 months (offer already in place in in process of being sold) of moving out - do I still escape CGT on the whole gain OR IS IT JUST TOO RISKY NOT TO MAKE THE ELECTION within the 2 years allowed AND EXPOSED?
Hi - is it possible for you to draft the content of the election and email me back. I am still resistant to make the election for the second property as it may raise questions when it seems unnecessary, especially as I am happy and not concerned about the 8 months gain on the first property. Final thought