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TonyTax
TonyTax, Tax Consultant
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I bought a flat in Sept 2007 for £228,500. I moved

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Hello,
I bought a flat in Sept 2007 for £228,500. I moved out of the flat in May 2014 and rented it out. The flat is tenanted until December 2016. The flat is now valued at £350,000 and I am considering selling it once the tenant leaves. This is presently my only property, I live in a rented house following my move which was due to work relocation.
If I sold in January 2017 for £350,000 how much capital gains tax would I be liable for?
I have heard that I have 3 years to sell from the date that I moved out before any capital gains tax would apply, is this correct?
Many thanks
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.
Hi. Leave this with me while I do some calculations.
Expert:  TonyTax replied 10 months ago.
If you sell the property in January 2017 for £350,000, you will make a gain of £121,500 (£350,000 - £228,500). You can also deduct the costs of purchase and sale (legal fees, stamp duty, survey fees, selling agent fees). Total period of ownership to January 2017: 113 months Period of owner occupation: 81 months Period of letting: 32 months Exempt gain: £106,447 (£121,500 / 113 x 99 (81 months + last 18 months of ownership) Letting period gain: £15,053 (£121,500 / 113 x 14 months (32 months - last 18 months of ownership) Gross Non-Exempt Gain: £15,053 Letting Relief: £15,053 (lesser of £40,000, £106,447 and £15,053) Annual CGT Exemption: £11,100 Net Taxable Gain: £0 Refer to HS283 for information on the main residence and CGT. You may have qualified for a fully exempt gain due to your work relocation but you would need to reocuupy the property nefore you sold it. In any event, letting relief will ensure you have no CGT to pay unless you sell the property for a substantially greater sum than £350,000. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 10 months ago.
If you sell the property in January 2017 for £350,000, you will make a gain of £121,500 (£350,000 - £228,500). You can also deduct the costs of purchase and sale (legal fees, stamp duty, survey fees, selling agent fees). Total period of ownership to January 2017: 113 months Period of owner occupation: 81 months Period of letting: 32 months Exempt gain: £106,447 (£121,500 / 113 x 99 (81 months + last 18 months of ownership) Letting period gain: £15,053 (£121,500 / 113 x 14 months (32 months - last 18 months of ownership) Gross Non-Exempt Gain: £15,053 Letting Relief: £15,053 (lesser of £40,000, £106,447 and £15,053) Annual CGT Exemption: £11,100 Net Taxable Gain: £0 Refer to HS283 for information on the main residence and CGT. You may have qualified for a fully exempt gain due to your work relocation but you would need to reocuupy the property nefore you sold it. In any event, letting relief will ensure you have no CGT to pay unless you sell the property for a substantially greater sum than £350,000. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 10 months ago.
If you sell the property in January 2017 for £350,000, you will make a gain of £121,500 (£350,000 - £228,500). You can also deduct the costs of purchase and sale (legal fees, stamp duty, survey fees, selling agent fees). Total period of ownership to January 2017: 113 months Period of owner occupation: 81 months Period of letting: 32 months Exempt gain: £106,447 (£121,500 / 113 x 99 (81 months + last 18 months of ownership) Letting period gain: £15,053 (£121,500 / 113 x 14 months (32 months - last 18 months of ownership) Gross Non-Exempt Gain: £15,053 Letting Relief: £15,053 (lesser of £40,000, £106,447 and £15,053) Annual CGT Exemption: £11,100 Net Taxable Gain: £0 Refer to HS283 for information on the main residence and CGT. You may have qualified for a fully exempt gain due to your work relocation but you would need to reocuupy the property before you sold it. In any event, letting relief will ensure you have no CGT to pay unless you sell the property for a substantially greater sum than £350,000. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 10 months ago.
Apologies for the multiple copies of my answer. I've been having technical problems with the dialogue page.
Customer: replied 10 months ago.
Thank-you, very clear and a better position than I feared!
Would the position change if I purchased a second property to live in prior to selling the flat?
Expert:  TonyTax replied 10 months ago.
No, it wouldn't. You could make an election for one or other to be treated as your main home from that point but it wouldn't change the past. If you kept the property for another year or two and achieved a higher price, you would need to revisit the figures.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15755
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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Customer: replied 10 months ago.
Thank-you
Expert:  TonyTax replied 10 months ago.
Thanks.

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