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bigduckontax, Accountant
Category: Tax
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We are considering selling our home and moving in a property

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Hi, we are considering selling our home and moving in a property that we currently rent out. Will we be subject to cgt on the sale if we are not buying another home? We have a buy to let mortgage on the rental property which we woul clear with the sale money.
JA: Have you talked to a tax professional about this?
Customer: No
JA: Anything else you want the Accountant to know before I connect you?
Customer: No

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

You are disposing of your sole or main domestic residence and although a Capital Gains Tax (CGT) liability arises you are entitled to Private Residence Relief (PRR) which relieves CGT at 100%.

Customer: replied 23 days ago.
The buy to let property that we are considering moving into has a buy to let commercial mortgage which we will clear with the funds from the sale. We are planing to stay in this property for 3-4 years.Should we be aware of any potential cgt issues on sale of this property? We would use any proceeds to buy another property as our principal resodence

Yes, you will be liable to CGT on the gain made, but time proportioned to reflect the PRR entitlement from your occupation.

Customer: replied 23 days ago.
How is the cgt calculated. The property was inherited and at the time IT was paid. We renovated the property using a commercial but to let mortgage. What will the cgt be based on if there was no initial purchase by us. Thanks

The gain will be calculated from the probate value and any improvements made is deductible from the gain less .of course, your non cumulative Annual Exempt Amount (AEA), currently 12.3K.

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Customer: replied 23 days ago.
Thanks for your help

Delighted to have been of assistance.