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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I used to live in a house that I was born and brought up in

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I used to live in a house that I was born and brought up in until ten years ago. The house was owned by my mother. My mother gifted the house to myself and my sister ten years ago as she was showing the first signs of dementia. We decided to move to an an area which would be closer to my mother's sisters and family. We retained the original house and have been renting it out for ten years. There was no mortgage on the original house but we borrowed on it to put a deposit on the new property, which is in my name. My mother lived, and was being cared for, by me in the new property until her death from Dementia 2 and half years ago. We are now considering selling the property which has risen in value considerably over the last ten years. It looks like there will be a very large capital gains tax burden. If the house is eventually sold the proceeds will be divided between myself and my sister and 2 other siblings. My question is can I move back into the property to reduce our tax burden?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

You could move back into the property. Provided you make it your main residence and live in that property, then you would be able to claim private residence relief against your share of the gain for all the period the property is your main residence and additional relief to cover the final 18 months of ownership (page 3)

You would also be able to claim letting relief (page 6).

More information on private residence relief is cover in HS283 here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323679/hs283.pdf


I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Is there a minimum period I would have to move back in for?

Customer: replied 2 years ago.

Hello, still waiting for a reply to my last question

Expert:  taxadvisor.uk replied 2 years ago.
Ish, thanks a lot for your reply.

You will have to do some sums to see what period is necessary to mitigate capital gains tax as this property has never been your main residence since it was gifted to you.

Look at the gain over the period and your share of it. Then make allowance for gains annual allowance to calculate chargeaable gain.

Just as a guess, I think you would have to consider a period 2-3 years.

I will be happy to carry out some caluculations for you as additional service if that is acceptable. Please let me know.

I hope this is helpful.
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Customer: replied 2 years ago.

That's not necessary for now. Thanks for your help

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