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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have two properties - one of which my daughter and

Resolved Question:

I have two properties - one of which my daughter and her partner lived in from 2005 until 2010, when they moved out and I rented privately. In 2008 I bought another property. This second property has been my main residence since 2008 and because it's in London, has made more profit. How can I minimise payment of CGT?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. There isn't much you can do I'm afraid. Assuming the first property was your main residence at some point during your ownership, you will qualify for main residence relief for the period that you lived in it and for the last 18 months of ownership regardless. If it was your main home, you will also qualify for letting relief for the period it was let privately which could reduce the taxable gain by up to £40,000. Unless you had some form of provable letting agreement in place with your daughter, even if rent free, HMRC are unlikely to accept a claim for letting relief for that period. If the property has never been your main home, then all you can to to get some main residence relief and letting relief is to move into it for a period of time. I would say that you need to lived in it for at least a year and even then HMRC may deny you main residence and letting relief on the basis that you moved in simply to get the tax reliefs and not to make it your home which they can and will do if they feel it is justified based on the facts. As far as the London property is concerned, if you live in that for the entirety of your ownership of it, then any gain you make will be tax free. That also includes the last 18 months of ownership if you move out before you sell it. Take a look at HS283 for more information on the main residence and CGT. I hope this clarifies your situation but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
Hi, I'm just checking in to find out if you need further advice or clarification.
Customer: replied 1 year ago.
HiThanks. So the property I'm living in currently, which has made the higher profit and I am also thinking about selling and then moving into my other property, will not be due any CGT. Is that correct?
Expert:  TonyTax replied 1 year ago.
That's correct if you have lived in the property you are currently living in since you bought it.
Customer: replied 1 year ago.
Ok thanks. All clear.
Expert:  TonyTax replied 1 year ago.
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