capital gains tax on selling a second home

Holdinghe

Hi
My husband and i both had properties when we got married in 2008. We both moved into my property and last september we let my husbands property. We are hoping to sell both properties next year. Can anyone tell me if it is correct that we would pay capital gains tax on the amount the property increased in value from the time my husband moved out until the time of sale?
Also would it be correct that it is an accountant we should see to get any advice on this?
many thanks

00ec25

as a married couple CGT rules mean you must have the same main residence, therefore as you moved into "your" place then that property is entirely exempt from CGT since it was (I assume) your own main residence for the entire time you owned it before marriage and thereafter it was the marital home so again exempt

now for husbands old place
- the capital gain is the difference between what he originally bought it for and what he sells it for. The "gain" since he moved out is irrelevant

- CGT works on a time basis: total period of ownership split into exempt periods and liable periods expressed as % of total length of ownership

- as (I assume) it was his main home before marriage it will be exempt for that period. From the date you got married in 2008 (note NOT the date he moved "out") to the date it sells that % is liable for CGT . Eg say he bought it for 100k in 2002 and he sells it for 150K in 2012 thus a 50K gain over 10 years. You married in 2008 so 6/10ths x 50K is exempt and 4/10 x 50K is liable.
ALSO because it was his main home he can claim letting relief this gives up to max £40K deduction from the size of the gain based on the duration of the let period - as yours is relatively short ie Sept 2011 to date, then it is possible you will not get the full 40k).
He also gets his personal allowance £10,600.

BTW I assume it is in his name only. Be very careful if you make it joint names as HMRC are very hot on such transfers done in the year of sale - they have the power to set them aside.

The basics of CGT are explained on HMRC helpsheet HS283 you should be able to do the tax return yourself without an accountant if you read it properly
http://www.hmrc.gov.uk/helpsheets/hs283.pdf

post up some numbers that relate to you iof you want a more representative example - especially on how the "lower of" rule works on letting relief as I think you will fall into that restriction given the short let period