CGT assistance please

macmomo

My husband and I have a house we lived in (him for 3 yr me for 1 yr) prior to having to move for work. We let the house out since December 2008. We are looking to sell this summer prior to emigrating. Our bank agreed that we did not need to change our mortgage from an offset to a buy-to-let one (not sure if that is relevant).

I used to be fairly well informed about tax and personal finance, but I've lost track in the last few years. I know that it used to be possible to move back into the house for a period of 3 months or so and pay the council tax etc so that it would again count as your primary residence for CGT purposes. Is this still possible? We rent elsewhere, we don't own any other property.

We will also be selling a small amount of stocks and shares between us from ISAs, possibly around £20,000 worth (profits will be very low though!) - I presume this has a bearing on the CGT we pay?

I have tried internet searching but haven't come up with the answers to these questions and would be most grateful for any help. Thank you.

Pennywise

You may not need to move back into your previous home. The final three years are exempt and you'll also get lettings relief. Do the calculations first and then see whether there's a gain - if not, then no need to move back in.

If the stocks and shares are in ISAs, they're exempt from CGT.

macmomo

thanks. so you mean the last 3 years of appreciation of property value are exempt from CGT? Sorry, I'm not quite clear what you meant.

I'll google lettings relief, not sure what that is (oh dear, I have become ignorant). We haven't paid much tax on rental income over the years as the property has needed thousands of pounds of work on it each year as it is a old property and was previously poorly maintained.

macmomo

I should also say that my husband bought the property for £164k a few years before I bought into it for half of £185K when we remortgaged (to a joint mortgage from his sole one) and got married in 2007. I doubt we will get more than £190K for it now. We paid off £40k+ from the mortgage in a couple of lump sums so we now owe £140K.

So will the tax be worked out on say £190-185 or would it be from 190-164?

macmomo

Quite confused by the HMRC website.

"Working away from home
You'll still get the full relief if you couldn't live in your home because you were employed and either:
you carried on all of your work or duties outside the UK
the distance from work or the requirements of your job stopped you living at home - and you were absent for less than four years
The following must also apply:
the house was your only or main home both before and after you worked away
you were not entitled to Private Residence Relief on any other property during that time (see 'Owning more than one home' below if you're unsure)
If you can't return to live in the house because your job still requires you to work away, you'll get the full amount of relief."

My husband and I are both in the armed forces, so yes our work required us to move away in 2007 and we haven't been able to return to our house since nor will we before we sell up.

So am I right in saying we qualify for the full amount of Private Residence Relief even if we don't move back in?

nomunnofun

On the basis that the home was always your main residence aside from the employment enforced absences the answer would be 'Yes'

However - will the 'less than four years' condition now be appropriate beyond December 2011- I presume you left to work abroad in December 2007?

macmomo

Not working abroad - working within the UK (moved to wales from 2007 - 2011, then moved to home counties from 2011-end 2013). The house is in Linconshire.

CLAPTON

start at the beginning and give us the cronology of ownership and letting although it would superficial seem that little or no tax is due anyway.


so
-when did he buy the property
-how much?
-when did he live there?
-when did you buy in
-when did you marrry
-what do you mean you bought into it for half of 185,000?
-is the ownership joint ?
-between which dates has the property been let?
-when did you both move out?

00ec25

macmomo wrote: »

My husband and I are both in the armed forces, so yes our work required us to move away in 2007 and we haven't been able to return to our house since nor will we before we sell up.

you say you own only the one property and rent elsewhere, if that rental is in fact in SFA then you are not liable for CGT at all as the job related accommodation rules apply to forces personnel so it means you remain entitled to claim private residence relief for your entire "period of absence" whilst living in SFA

macmomo

00ec25 wrote: »

you say you own only the one property and rent elsewhere, if that rental is in fact in SFA then you are not liable for CGT at all as the job related accommodation rules apply to forces personnel so it means you remain entitled to claim private residence relief for your entire "period of absence" whilst living in SFA

Yes, we have been in SFA since moving out of the house, although we moved out at separate times.

Husband bought with a mate in 2005 for £185k; he bought the friend out in 2006. We didn't get it revalued just took the other person's name off the deeds and put mine on and they were happy to accept furniture in lieu of any appreciation in value.

So it was his registered address from 2005. I was on the deeds from 2006 though I'm not sure I registered the address with work as my residence as I wasn't able to live there.

I was posted away in early 2008 and he was posted away in late 2008. We have lived in SFA since. The (whole) property has been rented out since December 2007 with only a short break between tenants. Current tenants will move out in April this year and then it's up for sale. We can't live in it in practice after April and we will remain in SFA until leaving the UK in December.

Thanks so much for taking the time to help. Husband is away unexpectedly from last weekend and he was taking care of this. I don't want him to be worried about it. Pre-baby I did all the family finances but...I'm a bit duller these days!

macmomo

still hoping for confirmation from someone?

The estate agents have valued the house much higher than we thought (probably too high), so we may now be looking at £30k profit.

Anyone confirm that we can count it as our only residence and be exempt from capital gains?