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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13917
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I own two properties, one is currently my main residence and

Resolved Question:

I own two properties, one is currently my main residence and has been for 4 years. The second was purchased 6 months ago and is currently rented. In 18 months time I want to sell my current main residence and move into the second home. what are my capital gains issues?
Thanks Steve
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts.
IF you were to move into the second property now - (and sell your current residence within 18 months) then you would reduce your exposure to capital gains on this second property (when sold in the future)
AS then the 6 months you rented this property out would attract private lettings relief thereby potentially reducing any gain to NIL (as up to maximum of £40,000 relief can be claimed
You also would avoid capital gains on the current main residence as the time spent there plus the last 18 months of ownership (if the property is vacated before sale) is covered under the private residence relief rules.
If you stay in the property (current main) until the sale, then there will be no capital gains as your home throughout ownership - but the current rental property might then during the two years of ownership exceeded a profit of more than £40,000 so could attract a charge of capital gains.
Let me know if I can be of any further assistance.
Thanks
Sam
Sam and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Just to clarify, if I follow my plan to move to the second home in 18 months I would be liable for a capital gain for any increase in the property value in the first two years above the £40,000? Is this correct? This is regardless of how long it is my main residence? I may only be my main residence for a year