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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16546
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My husband and I have a bungalow in Norfolk- we have a

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Hi, My husband and I have a bungalow in Norfolk- we have a mortgage of £120,000 on it and it’s valued at £250,000
JA: Have you talked to a tax professional about this?
Customer: we want to Sell the bungalow and buy another property nearer to where we live to rent out. We wondered if we had to pay capital gains tax?
JA: What are the assets or property for this capital gain?
Customer: We wouldn’t be making any profit as we would just be transferring the existing mortgage Over to another property
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?

Hi

if you now rent then when did you move out from the bungalow in Norfolk?

If more than 9 months ago then yes you will have a capital gain position to pay and must declare and pay this within 30 days of the sale, but the time it was your main residence plus the last 9 months of ownership  will from an exemption under the private residence relief rues

So time there plus 9 months/ total period of ownership

Then if any gain remains you each have the first £12300 annual exemption allowance

If a gain still remains then its at 18% or 28% the amount at 18% depends on how much unused basic rate band you have

Thanks

Sam

Customer: replied 13 days ago.
Hi,We have never lived in the property.We bought it as a buy to holiday let.
It is our only mortgaged property as we rent in St Albans.
We want to sell it for £250,000
and buy another property for £250,000 - so we will not actually profit from this at the moment as the mortgage and equity in the bungalow will be transferred directly to the new property we want to buy.We will not at any point have any money from the sale of the bungalow in our bank as we will be part of a chain of selling and buying.
Our mortgage advisor just said we needed to be 100% sure that capital gains tax did not have to be paid.
From our understanding we thought that we wouldn’t have to pay capital gains tax - as we are not selling the property and banking the profits we are transferring the capital into another property - snd when we come to sell in the future - that will be when we pay our capital gains tax.
Can you confirm either way - what the rules are in this instance please.
Kind regards
Emma

Then yes there will a gain as calculated above and  it must be paid to HMRC within 30 days if the sale

The fact you are buying a new home that takes all the sale money makes no difference I’m sorry to say you will owe HMRC the money snd be expected to pay by that 40 day deadline

This cannot be deferred as not a business asset

Thanks Sam

Sam and other Tax Specialists are ready to help you

30 day deadline* ( apologies)

Hi

Do let me know if I can assist further

Thanks

Sam