We have spent the greater part of our time in Glasgow since purchasing the house there. It is also the address from which I have been making my tax returns. No we didn't make an election on a main property within two years. Would our situation change if we moved back to the house in Bucks?
Hi again.Take a look at HS283 here for information on the main home and CGT.First off, the value of the Bucks property when you moved out is irrelevant to the calculation of any gain and its not possible to simply turn back the clock by moving back into the Bucks property and avoid CGT completely without living there for a long time. The gain is simply calculated on a straight line basis and is treated as having accrued evenly over the entire period of ownership. You did not make an election so the question of which is your main home will be based on the facts.From what you have told, the main home from about August 2008 will be the Glasgow one. You spend most of your time there, you worked in Glasgow, your parents and in-laws are there and you use that address for post.Assuming that the Bucks property was your main home until August 2008 or thereabouts, the gain for the period from June 1988 to August 2008 as a proportion of the whole gain will be exempt from CGT as will the gain for the last 18 months of ownership, again as a proportion of the whole gain. That covers about 21.5 years of the gain. The balance of the gain (about 5.5 years worth) will be taxable. Each of you and your wife will qualify for an exemption from CGT for the first £11,100 of gains they make in a tax year.
Had the Bucks property been let to your sons, you may have qualified for letting relief which would have reduced the taxable gain.I hope this helps but let me know if you have any further questions.