Capital Gains Tax

madmax2

Please can you advise me. I have a property (which I have lived in for over 14 years and is solely in my name) where I have almost paid off all the mortgage except £5000.00 and currently have this property on the market. I am in the process of purchasing another property with my partner which is of a higher value which I will be puchasing with a high mortgage and all my savings. I am planning on going ahead with this puchase without waiting for my property to sell. Can you advise me where I stand with Capital Gains Tax.

Any advice on this matter would be greatly appreciated.

Bermuda_John

no capital gains tax until you sell the property

if it is your principal residence (home) then you pay 0% tax

madmax2

Thanks Bermuda John for your reply

The house we are selling is our principal residence. I dont want to miss out on the new property we have seen thats why I am planning on going ahead with the purchase without selling my current property. So are you saying I wont have to pay Capital Gains Tax then? as it is my principal residence.

silvercar

You have three years, from the time you move out, to sell before you incur any CGT liability.

00ec25

as Silvercar says the relevnt fact is you have 3 years from the date you move out of a property which was your principal private residence to complete on its sale

madmax2

Many thanks for clarifying this for me so I suppose as long as we hopefully sell it within 3 years we wont get stung! What if we rented the property out whilst trying to sell it? Would we be liable for Capital Gains Tax?

Gwhiz

madmax2 wrote: »

Many thanks for clarifying this for me so I suppose as long as we hopefully sell it within 3 years we wont get stung! What if we rented the property out whilst trying to sell it? Would we be liable for Capital Gains Tax?

No. The 3 year rule applies to the house, not what you do with it. So as long as it WAS your primary residence and then you rented it out, the last 3 years of ownership is still CGT free.

Bermuda_John

not forgetting you can elect which is your principal private residence, i do remember some politicians getting round CGT by doing this.

madmax2

Thaks Gwhiz and Bermuda John for clarifying this for me. It's a stressful time for both me and my partner at the moment and we are trying to save money where we can as it is initially going to be a struggle going ahead purchasing the 2nd property without selling our cuurent one - just hope it all works out!

Thanks again.