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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3820
Experience:  FCCA FCMA CGMA ACIS
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My parents and I purchased a property in 1993 which has been

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My parents and I purchased a property in 1993 which has been my main residence over most of that time. I did purchase a flat in 2011 which I have been using whilst working away from home. Both parents are now deceased and I wanted to sell both properties and buy a single property. What would the tax implications be on that? Thanks
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to assist you with your question. Your tax position is akin to the curate's egg; good in parts. Unfortunately, I cannot be completely accurate whilst the meaning of 'most of the time' remains obscure. However, you are allowed up to four years away for job related reasons before your Private Residence Relief (PRR) begins to be trimmed and for the last 18 months of ownership PRR is extended anyway as you are deemed to have been in residence at this time even if it is not the case. Your flat, a second home, will be subject to Capital Gains Tax (CGT) on the gain made on sale. The gain is calculated by deducting the acquisition cost from the disposal proceeds. The latter is the net receipts, ie after deduction of selling costs, The former is the purchase price plus costs plus any improvements eg installation of double glazing, central heating, extensions, but not routine maintenance. You do have an Annual Exempt Amount (AEA) of 11.1K to offset this gain. The gain will be taxed at 18% or 28% of a combination of the two rates depending on your income including the gain in the tax yer of sale. You are definitely being caught by Benjamin Franklin's dictum that in life there are but two certainties, death and taxes. I did warn you that the situation is not painless.

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