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bigduckontax, Accountant
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I own a house that I am plannng to sell. It has been rented

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I own a house that I am plannng to sell. It has been rented for the last 25 years and I lived there for 5 years before that. When I sell, will I be liable for capital gains tax?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help ou with your question. Yes you will be liable for Capital Gains Tax (CGT) on the gain you make on sale, but not for the full amount of the gain as you are entitled to Private Residence Relief (PRR) for the period you occupied it as your sole or main domestic residence plus the last 18 months when you are deemed to be in occupation even if this is not the case. In general terms your ownership time is say 360 months. Your occupation time was 5 years plus the 18 = 78. 360 - 78 = 282 so only 282 / 360 [78.3%] of the gain is exposed to CGT. from this you can deduct 11.1K Annual Exempt Amount (AEA) a non cumulative relief plus Lettings Relief (LR) up to 40K. CGT is then levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. The gain is the difference between the net selling price ie after the deduction of selling costs including advertising and the acquisition cost. The latter is the purchase price plus purchase costs including stamp duty plus improvements eg installation of double glazing, central heating extensions etc but not routine maintenance which can be offset against rental income during the letting period to reduce your Income Tax (IT) exposure. There you are, a quick gallop through the consequences of the ownership of your house. I do hope that you have found it helpful.
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Customer: replied 1 year ago.
Hi
Thanks for your answer. Much more complicated than I thought. If I lived there from now for 18 months and then sold it, would I still be liable for CGT?
Expert:  bigduckontax replied 1 year ago.
Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes! I am so sorry to have to rain on your parade, but you would still be liable to CGT if you re-occupied, but the proportions might change. It would also strengthen your claim to LR to receive which you must have been resident either before, after or both the letting period. Thank you for your support

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