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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have two properties: a flat that used to be my home, and

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I have two properties: a flat that used to be my home, and a small house that I live in with my children. I would like to sell my house at a gain (I bought it less than a year ago) and move back to my flat which has been rented out for 2 years. If I sell my house and move to my old flat will I have to pay CGT please?

So long as the house has been your main home for the entire period of your ownership of it to date and you sell it within 18 months of moving out, you should have no CGT to pay.

I realise this may seem odd as nobody buys a home with the intention of selling it at a loss but, theoretically, if you bought the house with a view to making a profit as opposed to making it your home potentially for the medium to long term (although people's plans do change and HMRC recognise that) and HMRC can prove that profit was the main motive for buying it, the gain could be taxed but this is very unlikely to happen.

Take a look here for more information on the main home and CGT.

I hope this helps but let me know if you have any further questions.
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Customer: replied 4 years ago.

Thanks, XXXXX XXXXX I move back to my flat and sell it a year later will I be liable for CGT on that?

That would depend on how long you will have owned it by the time you sell it, how long you lived in it, how long it was let for and the amount of the gain you make.

The gain for the period a property is your main home is exempt from CGT as is the gain for the last 18 months of ownership. The remaining gain is potentially taxable but as the property will have been both your main home and let you will be entitled to a deduction from that remaining gain called letting relief which will be the lesser of:

1 £40,000,

2 the sum of the main residence gain and the gain for the last 18 months of ownership of the property excluding overlaps to avoid double counting and

3 that part of the letting period gain which is not covered by the last 18 months of ownership.

If there is any remaining taxable gain after allowing for letting relief, the first £11,000 per part owner of that gain will be exempt from CGT.