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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16303
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I kept my first house and rented it out to my in laws. I

Customer Question

Hi, I kept my first house and rented it out to my in laws. I lived in it for 7 years first. I lived in another house for nearly 13 years (owned with my husband). We sold our house and have been living at my first house since March because there is a long delay with our house purchase. I just wondered if the CGT is dealt with any differently when we eventually sell my house because it is currently our main residence again. Thanks for your help.
JA: When was the property or asset sold?
Customer: I haven't sold it yet, would be looking to sell it in about 3-6 months.
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: I don't think so, thank you
Submitted: 11 days ago.
Category: Tax
Expert:  Sam replied 11 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 11 days ago.

Hi

No you are still liable to capital gains tax only then time you lived there plus 3 of the 7 years gap are exempt (as you left but came back so three years for any reason are added in )

I assume you declared all the rental income to HMRC

Thanks

Sam

Customer: replied 11 days ago.
Thank you. Yes all rental income declared. So if I lived there for 7 years and you can add another 3 because we came back 10 years are exempt?
Expert:  Sam replied 11 days ago.

Hi

No as you would have owned it for 20 years by the statement above

Lived in for 7 lived elsewhere for 13 then came back to the first house so 7 plus 3 - so that's 10 out of 20? is that not right ?

Thanks

Sam

Customer: replied 11 days ago.
that's what I was meaning so 10 years out of the 20 are exempt.
Expert:  Sam replied 11 days ago.

Hi

Yes

That's right :)

Plus costs to buy and sell (legal fees and estate agent fees etc are deducted and any capital improvements such as new kitchen or bathroom or new roof etc)
then whats left over the first £12300 is exempt leaving the ba***** *****able to capital gains tax

The rates are 18% and/or 28% depending on your annual income (so if you have income less than £5000 a year then you would have some unused basic rate band allowing the same amount of gain to be charged at 18% and any remaining gain at 28%

Sales must be declared to HMRC within 30 days link here https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

Thanks

Sam

Customer: replied 11 days ago.
Thank you Sam that's a great help
Expert:  Sam replied 11 days ago.

Hi

You are very welcome

Thanks

Sam