Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Supposing you sold in 2017 then 3 / 30 less the last 18 months (you are deemed to be in residence for the last 18 even if this is not the case) = 5% of any gain you make on the sale will be subject to CGT. The gain is the difference between the disposal and the acquisition price. The former is net ie after deduction of selling costs including advertising whilst the former is the buying price plus costs of purchase including Stamp Duty plus and improvements eg installation of double glazing, central heating, extensions etc but not routine maintenance. Once this has been calculated you deduct your Annual Exempt Amount (AEA) of 11.1K plus Lettings Relief (LR) up to 40K and the balance will be taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. You can now see that this is likely to be a relatively small sum.
There is no need to move back in and re-occupy. Your residence before letting opens the door to LR.
I do hope that you have found my reply of assistance.
350K - 42K = 308K gain, 5% is 15.4K. Less the AEA leaves 4.3K exposed to CGT so, even if you do not get lettings relief, the maximum exposure would be some 1.2K of tax due. I suspect that LR will knock that out anyway.
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