Capital Gains Tax on Selling Property (Main Residence)

sun8eam

Hi,

I hope someone could advise on this CGT query.

I have owned my property since 1995. Have lived there for 10 years, then subsequently rented it out for 5 years (from 2005 to 2011 approximately. I then moved back into the property and currently reside there, so for the past 2-3 years.

I am thinking seriously about selling it now. With this in mind, I would like to know what Capital Gains Tax I am liable to pay?

There would potentially be a £148K gain on the property if it was successfully sold at my asking price.

Also, will I qualify for the last 3 years exemption as it was his main residence? I Just want to understand how this works and how much I might have to allow for CGT.

If you need any further information, I will be happy to provide.

Thanks in advance,

sun8eam.

jamesml

There are bunch of rules and fiddly bits based on principal private residence relief - too many to remember off the top of my head from tax classes years ago.

Have a read here and as ever, if in doubt contact a qualified tax professional/accountant.


A lot will depend on how long you were gone for and why.

00ec25

the time approtionment calcualtion must be done in months not years but for the purpose of illustration I have used your years data:

CGT gross gain 148k
period of pownership 1995 - 2013 = 18 years

LESS CGT private residence relief (PRR) exempt period due to occupation 1995 - 2005 = 10 years, plus , as it was once your main residennce, the last 3 years are also exempt therefore exempt period 13 years
total amount exempt : 148 x 13/18 = £106,888

less letting relief due to it once being your main home: LOWER OF
a) PRR £106,888
b) gain during let period (excl final 3 years) 148 x (18 -13)/18 = 41,111
c) max permitted letting relief 40,000
letting relief capped at 40,000

less annual exempt amount (12/13 rate) 10,900

Net CGT gain 148,000 - 106,888 - 40,000 - 10,900 = ZERO

you have a nil net gain so are NOT liable to PAY any CGT assuming you have no other gains that tax year and thus have all of the 10,900 allowance available. If not then as you can see from the maths you might end up with a tiddly net gain