Capital Gains Tax on owned home question (live in SFA)

Pebbles69

we didnt live in our property as it was a 3 bedroom house and far too small for our family needs but bought as an investment so we didnt struggle to buy a property on leaving the army.
My husband is still in the army but decided to sell the house so we could buy a large enough property to live in and move out of quarters as was so fed up with being allocated quarters off of camp in the middle of nowhere because 4 bed quarters were in such short supply and was also fed up of having to change childrens schools.
Provided you only own one property and are unable to live in it due to your job you are exempt from cgt.

Redouble

That's interesting and I hope applicable to us! Thank you :money:

00ec25

Pebbles69 wrote: »

Provided you only own one property and are unable to live in it due to your job you are exempt from cgt.

sorry but the guidance for forces personnel (or anyone else living in "job related" accommodation) is explicit - there MUST be an intention to live in it at some point in the future.
http://www.hmrc.gov.uk/manuals/cgmanual/CG64555.htm
Simply owing it is not enough to make it exempt. However, the guidance also accepts that you may not (ever) in fact live there as circs can and do change, therefore in your case, you were exempt for that reason, you changed your mind and bought elsewhere...

Redouble wrote: »

We will never live in the house and do not intend to ...

as above,
you have therefore negligently discharged into your foot and your jankers is to be liable to CGT

of course proving intent is a whole other issue for either you or, more importantly, HMRC...

Redouble

That's what I thought
We knew we may be liable for GCT when we bought the house from them (the intention was to help them not to make money) so I am not hugely concerned. Would have preferred it if the rate had not just gone up though obviously :rotfl:

CKhalvashi

Another interesting point is regarding the circumstances of which the property was bought.

Technically it wasn't an investment, as presumably you're paying the mortgage with no rental income each month.

Just another point to battle with HMRC.

CK

molerat

Redouble wrote: »

That's what I thought
We knew we may be liable for GCT when we bought the house from them (the intention was to help them not to make money) so I am not hugely concerned. Would have preferred it if the rate had not just gone up though obviously :rotfl:

I think you may have opened a whole new can of worms there.

Redouble

CKhalvashi wrote: »

Another interesting point is regarding the circumstances of which the property was bought.

Technically it wasn't an investment, as presumably you're paying the mortgage with no rental income each month.

Just another point to battle with HMRC.

CK

We don't earn any income from it no

Redouble

molerat wrote: »

I think you may have opened a whole new can of worms there.

Perhaps to the outside perspective, but for us, it is a perfectly happy situation.

oscardog

If it is your only house, how would HMRC ever know you do not intend to live there one day?

As your only house, it would remain your primary residence and so exempt from CGT.

Or am I over-simplifying?

Redouble

oscardog wrote: »

If it is your only house, how would HMRC ever know you do not intend to live there one day?

As your only house, it would remain your primary residence and so exempt from CGT.

Or am I over-simplifying?

Hmm possibly, good point. I certainly don't want to defraud the system (I did take CGT into account when we bought the house) but not paying would be my preference as I'm sure it is everyone! :rotfl:

Really appreciate the replies, thank you