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Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Hi, I tool ownership of 32% of a property in London in early

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I tool ownership of 32% of a property in London in early 2012. I then moved out in late 2012. I'd like to know how late I can move back into the property to classify it as my principal private residence and get relief from CGT. The plan is to sell the property after January 2017.
Many thanks!
Hi Philip
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.
Can you advise why you moved out of the property in late 2012. where you moved to, and whether you own any other property , and if yes, then is this where you have been living from late 2012 to date?
Customer: replied 3 years ago.

Hi Sam,

I moved out of the property to move in with my then girlfriend. I moved to a house share private rental and then, once we got married, to a flat, also private rental and where we currently live. I don't own any other property. the balance of the property to be sold is owned by my father.



Hi Philip
Thanks for your question,
Then I am afraid you have a capital gain arising, regardless of whether you move back into the property or not
This is because the time in 2012 you lived there would be exempt from capital gains (as private residence relief would have been due) plus the last 18 month of ownership.
But as you moved out late 2012, and we are now Jan 2015 - then the period (at todays date) from June/July 2013 to Dec 2014/Jan 2014 is the last 18 months of ownership used up (and this will continue to move forward so its always the last 18 months given exemption upon)
But, as you cannot change the gap from early 2013 to June/July 2013, which remains a period of time on which you are not due any tax reliefs, this forms the gain arising, which as you can see, will expand as
1) the property value increases and
2) the longer you hold onto the property before selling
So a move back now, will prevent the position from getting more costly for capital gains, but cannot wipe out the fact they arise.
Customer: replied 3 years ago.

Thanks Sam.

Supposing I moved out of the property in late July 2013, would I need to move back in late January 2015? Also, if i move back late July 2015, am I not covered between Jan 2015 and July 2015?

Many thanks


Hi Philip
Thanks for your response.
If you did indeed move out July 2013 then this only has a bearing if you sell Jan 2015 - (so that the time you lived there and the last 18 months of ownership are covered by private residence relief.
If you sell after Jan 2015 - say Aug 2015, then the last 18 months of ownership are from Jan 2014 to Aug 2015 - so you still have a capital gain position arising for the period from when you moved out to the start of the last 18 month period.
So a move back in Jan 2015, does not allow 2 x last period of ownerships - its the FINAL 18 month period that can be considered along with the time you actually lived there.
The last 18 months can only determined once the sale has taken place.
So if you sold in say Jan 2017, but move back in Jan 2015 - and stayed there until the sale took place, then you would be due private residence relief for the period early 2012 to late 2012, and Jan 2015 to the sale date (in this instance you would lose the last 18 months of ownership, as you actually living there would over ride its entitlement as already exempt due to it being your main residence)
But you would still have the gap between late 2012 and Dec 2014 on which a capital gain position exists.
Same if you moved back in July 2015 and sold Jan 2017 and remained living there throughout - this period would be covered under the private residence relief rules, as would still early 2012 to late 2012. (again no last 18 months as you living there and being due private residence relief due to this being your main residence)
There is no avoiding a consideration of capital gains - but it may be small and the first £11,000 of any gain is exempt each year (the current annual exemption allowance, this is subject to change)
Do let me know if you wish me to expand on any of the response provided, but if would be appreciated, if you could rate/accept the answer, as this ensures I am credited for my time by Just Answer - many thanks
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