Capital Gains Tax

pigeon33

Hi, I have had an investment property for many years and now wish to sell it and invest the money into property funds,, as it is getting more and more difficult to do the maintenance etc as I get older, but still I need the income. If I do this, would I be liable for capital gains on the sale of the house or can I roll it over into the property funds?

willsken

I know it isn't quite the same but I asked the Inland Revenue if we could sell out 2 rentals and put the gains into another one and was told no. Only a business can roll money into something else. Will be interested to see the replies you get.

Elaine_Wilson

Willsken is correct. Only business assets will qualify for a roll-over relief (and investing in property is not considered a business for this purpose).

If you do sell make sure you claim any indexation and taper relief available.

Could you make this property your main residence for a while? This would open up a lot of extra relief.

pigeon33

How long would it have to be my main residence??

pigeon33

Thanks for that, but do you know how long would it have to have been my main residence??

willsken

I read on this forum that it as long as you live in it, it is your main residence. However someone kindly responded to my question and said I would need to live there for a few months. I'm sure someone will have a definite answer.

davef

Hi - to use the rental as your principal private residence you do indeed have to live in it and be registered at that address for council tax, utility bills, electoral roll etc.

Whilst there is no hard or fast rule as to length of time I would advise a min 6months. This would atleast seem reasonable to the IR. It also appears to be the the consensus on many property forums and what my broker told me today. Put it this way if you lived in it for 2 weeks it does not look like a longer term residence or that you had intentions to stay ?? Also what docs would you register for such a short time.

Also worth reading up on related articles which can be found under the property tax section of taxationweb.co.uk

If in doubt spend a bit of time with a financial advisor or property accountant to check how to minimise the CGT.

Good luck.