Capital gains tax on selling property

conradmum

My OH and I plan to buy a holiday/retirement home by remortgaging our main residence. Once the mortgage is paid off, we plan on selling the big house and moving to the little one, then using the proceeds of the sale to help us through retirement. Would we be liable for capital gains tax? Is there any way of avoiding this?

reddevilled

conradmum wrote:

My OH and I plan to buy a holiday/retirement home by remortgaging our main residence. Once the mortgage is paid off, we plan on selling the big house and moving to the little one, then using the proceeds of the sale to help us through retirement. Would we be liable for capital gains tax? Is there any way of avoiding this?

Just to clarify, do you mean you will be selling your current main residence?

If so, and assuming that you have always lived there and the garden is reasonable in size compared to the property, then the principal private residence exemption will exempt your liability to capital gains tax.

conradmum

Sorry for the delay in replying. Yes, this would be our principle residence we would be selling. The garden is large but isn't more than probably 1/4 acre if that. Is the total amount of the selling price exempt? Or is there a limit?

reddevilled

As long as you had always lived in it as your main residence and the garden is a reasonable size compared to the house (which it is) then any gain on the sale is exempt from CGT - no matter what the selling price or original cost.