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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 used to live in a property years, I sold that property

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I used to live in a property for 16 years, I sold that property last year, prior to the sale I had obtained planning permission for part of the land, this part of the property I kept, I have since built a bungalow on this land, I own no other property, if I decide to sell the bungalow am I subject to Capital Gains tax ? how long would I have to live in it to negate this tax if it is applicable
Hi. Assuming you moved into the property as soon as it was ready, that your intention was not to build the new property and sell it for a quick profit and you live in it for a reasonable period before selling it (I would recommend a year at least though there is no prescribed time frame), then any gain should be free from a a Capital Gains Tax liability. If you live in the property for a short period, you risk HMRC taking an interest and possibly trying to make a case that your intention was not to make the property your home but to make a quick profit. They might even say that you had traded as a property developer. A year spent in the property where you give the impression of your intention to stay there permanently should negate that possiblity. Take a look at HS283 for more information on the main residence and CGT. I hope this helps but let me know if you have any further questions.
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