Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi, between 2002 and Nov.2011 it was my main home. It was rented out between Nov 2011 and Jan 2014, empty until now; due for exchange of contract and completion on the same day - 28th of March 2014.
Ok, thank you.
Hi, I have looked at teh helpsheet before, what made me confused is whether the 3 years still apply even though the property was rented out? The information on the sheet is not very clear on that. Also, where can I find some more info on the letting relief (if it would be needed in the worst case scenario) because all the forms refer to it and say that it is up to £40k but it doesn't say if it is £40k per person or per house; in other words can I claim up to £40k letting relief and my husband (joint owner) up to £40k or each of us could only claim up to £20 (total £40k).
You only account for each month of ownership once. Any part of the letting period which is covered by the last 36 months of ownership (18 months after 5 April 2014) does not qualify for letting relief as that period will be exempt from CGT in any event. If you exchange contracts on 31 May 2014, for example, the gain from the purchase date in 2002 to the date you left in November 2011 will be exempt due to main residence relief.The gain for the last 18 months of ownership will also be exempt due to the extension of main residence relief. That will cover from 1 December 2012 to 31 May 2014.The letting period gain not covered by the last 18 months of ownership will start on the date the property was first let in November 2011 and end on 30 November 2012.Letting relief of up to £40,000 is available to each part owner of a property so long as it has been let during that part owner's period of ownership. So, for example, if the house was in your name only as of now, your spouse would not be entitled to letting relief if you put it into joint names before the sale as it will not have been let during her period of ownership, given that the letting ceased in January 2014.