CGT on only property I own?

Anit377

Hello,

I have sold my share of an inherited property, which is the only property I have owned. I have not lived there during owning the property (my sibling has) but lived in rented accommodation.

Am I liable to CGT or does Private Residence Relief apply, as it is the only property I own, even though I do not live there?

Thanks

Pennywise

Anit377 wrote: »

Hello,

I have sold my share of an inherited property, which is the only property I have owned. I have not lived there during owning the property (my sibling has) but lived in rented accommodation.

Am I liable to CGT or does Private Residence Relief apply, as it is the only property I own, even though I do not live there?

Thanks

No private residence won't apply as you've never lived there. You'll be liable to CGT on the difference between selling price and the valuation for probate (less selling fees etc).

chrismac1

It's strictly too late, but arguably you could have made a main residence election:

"Only or main residence

If you live in, as your home, 2 or more houses, you can only have 1 main residence at a time for Private Residence Relief. You can nominate which residence is to be treated as your main residence for any period. Your nomination must be made within 2 years of the date you first have a particular combination of residences. If there is a change in your combination of residences, a new 2-year period begins. If you don’t make a nomination, the question of which is your main residence will be determined on the facts."

(From HS283 PPR manual on HMRC)

In terms of the risk, I believe the main way HMRC picks up on CGT which has not been declared is by matching postcodes and names from their database with the Land Registry database. One taxpayer and 2 entries at Land Registry - we can conclude a property disposal could trigger a CGT bill.


In your case, if you only have 1 entry at Land Registry, the risk would appear to be low. Had you not posted on here, you would not know about the complex rules around main residence election, so could claim in all honesty to believe you qualified for PPR.

Pennywise

OP couldn't have made an election as they only own one property. You need to own two to make a valid election.

Anyway, it's never been their "residence" neither main nor otherwise, so what Chris is suggesting is illegal tax evasion. Don't do it.

00ec25

physical occupation is a key requirement for claiming PRR, so not possible, you've never lived in it.
That same rule would also scupper Chrismac's "suggestion" regarding nomination.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64465