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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17207
Experience:  International tax
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We own a house which was our only or main resident from December

Customer Question

We own a house which was our only or main resident from December 1999 to May 2013. In May 2013 we bought another house which became our main residence and we rented out the original property. It has been let for the last 2 years. We now want to sell it and anticipate making a gain. Will we be required to pay capital gains tax?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
You may have some to pay on the sale. You must have lived in your home as your only or main residence at some point while you owned it (which you have).
No matter how many homes you own or where you lived at the time, you always get relief for:
the last 18 months before you sold your home
the first 12 months you owned the home if it was being built, renovated or you couldn’t sell your old home
You must have lived in the home as your only or main residence at some point while you owned it.
You get relief for these periods even if you nominated a different home as your main home.
If you’ve nominated a home you can’t get relief for the other property for the time your home is nominated, apart from for the periods that always qualify for relief.
CGT kicks in when you sell a let property at a profit of more than the annual allowance, currently £11,100 in 2015/2016. HMRC divides any gains made on property ownership evenly over the years. So you may look to letting relief for the time of letting the property. Letting relief is worth the lowest of three amounts: private residence relief already claimed, the value of the increase in capital gains which occurred during the period when the property was being let, or £40,000.
To simplify the answer, yes you may have to pay capital gains tax, but not on the entire sale price and the relief that you are allowed will reduce the CGT further.
Your portion that will be taxed will be based on your length of time you used the home as your main home and how much your gain turns out to be.
Expert:  TaxRobin replied 2 years ago.
Wanted to touch base with you and make sure all worked out.