CGT on inherited house?

tigerbay

The plans are to move to from our joint owned house to a recenctly wifes inherited house (wifes parents). We wish to rent the origanal home and maybe sell in 10 years time.

The taxoffice wants my wife to declare our primary home - should this be the new inherited home , and do we pay the CGT on the origional home when sold ?

00ec25

a married couple can only have one main home and it must be the same property for both of them

if you let out the original property you cannot then nominate it as your main home as you can no longer occupy it, therefore it will be liable for CGT from the date it is put up for let (at that point the property becomes your business asset, it is no longer your second home so loses its PRR status)

look on HMRC or search on here for examples of how to calculate CGT on let properties that used to be your main home - this question recurs every few days

xylophone

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4020890

tigerbay

thanks for the advice chaps.

I know my wife has had a form from the tax office to ask her to nominate her chosen home as residence (going through probate) . But when or how do i nominate my same choice?

xylophone

See link above
Married couples or civil partners owning more than one home
If you are married or in a civil partnership and have two or more homes, both you and your spouse or civil partner must notify HMRC which of your homes is your main home for Private Residence Relief purposes - and it has to be the same one. Both of you should sign a notification.