Capital Gains tax on rental property

DrPepper123

I posted this on the property forum but this might be a better place.


If you sell a property, that was once your residence but then let for say 3 years, when you come to sell it do you pay CGT and if so how is it worked out?

Thanks

Cook_County

DrPepper123 wrote: »

I posted this on the property forum but this might be a better place.


If you sell a property, that was once your residence but then let for say 3 years, when you come to sell it do you pay CGT and if so how is it worked out?

Thanks

In this scenarion there is no UK tax payable as the periods of occupation and deemed occupation eliminate a charge to CGT.

DrPepper123

Cook_County wrote: »

In this scenarion there is no UK tax payable as the periods of occupation and deemed occupation eliminate a charge to CGT.

Thanks. So what are the periods of occupation where you do start paying, is it anything over 3 years?

Also does CGT only work out on any profit of selling, not the actual sale price?

ceeforcat

For example - period of ownership is 6 years and the property was your main residence for two years.

Capital gain is 24000 (profit). The property is your main residence for two years and the last three years is exempt BECAUSE it was at one time your main residence. 5/6 of 24000 therefore, is exempt and 4000 remains chargeable. This is less than the annual exemption and no tax is payable. Further reliefs are available if the property was rented out.