CGT on house sale

ET1976

Not really a 'cutting' tax question but still a tax question:
I currently own a property which I lived in for 5 years but now rent out and am thinking of selling it next year. It has been over 3 years since it was my main residence so I know I will have to pay CGT, but I have a couple of queries on that.

1. How is the value at the point at which it ceased to be my main residence calculated? I had it valued when we were given the original date for moving to our new house, but we then had loads of setbacks and ended up moving quite a bit later, by which time I had forgotton all about the valuation issue as I had already mentally ticked it off my list.

2. I bought the property when I was single and I am the only name on the mortgage; the mortgage, maintenance, all other expenses on the house have been paid solely by me, from an account in my name only. However, I am got married whilst living at the property and my husband moved in for about 1 year between the sale of his house and us moving to the new one. Would this complicate the ownership of the property and if so would that impact on CGT at all?

thanks for any advice!

fengirl_2

In answer to your questions:
1. It isn't. The gain is worked out on the difference between the sale price and the purchase price. The period during which you lived in it, plus the final 3 yrs of ownership are deducted on an apportioned basis. So if your gain was £50,000 and you owned it for 10 years, 5 of which were let, then the exempt gain would be half, or £25k.
2. No - the gain is assessable on the owner of the property.

You do know about the £40k let property exemption?

ET1976

Thanks for that. So if I were to sell it today, the increase in price would be approx £100k, owned it for 9 years, lived in it for 5, rented it for 4, I would be paying CGT on how much? I'm not quite getting where the 3-year bit comes in!

fengirl wrote: »

You do know about the £40k let property exemption?

no... you can see how ignorant i am... will look into it!

fengirl_2

If you sold it today at a gain of £100,000, 8/9th would be exempt - £88,888, leaving £11112 which is covered by the £40k letting relief.
Its quite exceptional for a property which has been you main home and then let to give rise to a chargeable gain. I think the government don't want people to be hit by tax when they are genuininely providing homes for people, rather than just buying property to raise a gain.

ET1976

nice one, thanks, that makes sense. better than I was expecting!