Capital Gains Tax Queries

vik1491

Hi. I have 2 queries
1. If I buy a house and rent it out for say 5 years and then I live in it for a year will I have to pay capital gains tax?
2. How many joint owners can you have on a property? If there is no limit then surely it is favourable to have as many holders as possible due to the £8200 Capital gains tax relief.

Thanks

silvercar

you would have CGT exemption for the time you lived in it as your PPR and the last 3 years of ownership.

I thought there was a max of 4 on a mortgage. the actual number of owners can't be restricted as people inherit all sorts of shares.

Whereas putting a house in 20 names sounds clever, you have to be able to trust these people. 60% of something is better than 0% of nothing.

If you try and be too clever the Inland Revenue will not be impressed.

vik1491

But would I be exempt from CGT if I rented the house in my first three years of ownership and then lived in it for a year?
Or better still after the first three years I carried on renting until the CG of the house reached the PLR limit of 40000 (assuming PPR is in excess of this figure) and then lived in the house for a year and then sold avoiding any CGT!

PoorDave

Are you buying with a mortage? As stated above, 4 might be your people limit on that. CGT exemption is £8800 this tax year.

mark_casey

just remortgae it and carry on renting it out no capital gains on remortgages.
only when you sell . and if you never sell no tax to pay.
tax people will see what you are trying to do and if they think its a sham then they will tax you the whole lot.
the longer you hold the property the better your taper rlief will be and after 10 or so years that amounts to approx 80% redution( but i would check this with an acountant )