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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have two flats, one of which I rent out and one which I live

Customer Question

I have two flats, one of which I rent out and one which I live in.
I would like to switch the property status around and rent out the property I currently live in and sell the current rental flat. if I did this would I have to pay tax on the sale of the current rental property when essentially I am 'flipping the status' (i.e. my current flat would become the rental property for the foreseeable future i.e. at least another 10 years)?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. Take a look at HS283 here. Whether your gain on the current rental flat would be fully tax free would depend on the facts and figures, ie how long you have owned it, how long it was your main home for if at all, how long it was let for and the amount of the gain. You get exemption for that part of a gain which is covered by your occupation of the property as your main home and for the gain for the last 18 months of ownership regardless. You will qualify for letting relief if the property has ever been your main home, ie you lived in it. Take a look at example 9 of HS283 to see how main residence relief and letting relief work in combination. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
I'm just following up to find out if my answer helped or if you have any further questions. I'd be happy to do some calculations if you give me some details about the flat you wish to sell.