Capital Gains Tax on 2nd Property

Matt_London

Evening all,

Last year I purchased a flat with money that I created by re-mortgaging my first property (I had lived in the first property for six years, it is currently rented and I plan to sell it within the 36 months allowed to avoid CGT).

My second property has required a lot of work and I have been living with my girlfriend while the work has been carried out. The work has taken nearly a year and now I want to sell the flat and live with my girlfriend rather than keep the flat.

The flat was purchased for £230k, I have spent over £40k on refurbing the flat and another £15 buying the freehold. I believe the flat is now worth £350k

Based on the above information:

1) Am I liable for CGT? (I understand that I can have up to 12 months relief if the property can't be lived in)
2) If the above doesn't apply can I nominate the flat as my primary residence as I have continued to pay council tax and all the utility bills since I first purchased the flat?
3) If neither of the two cases above apply how long would I need to live in the flat for to avoid CGT?

Thanks for any advice in advance.

Matt

grey_gym_sock

1) an uninhabitable property isn't exempt from CGT if you never live there. if it becomes your residence later on, you may be able to extend the PPR exemption back to when you bought it: http://www.hmrc.gov.uk/manuals/cgmanual/cg65003.htm

2) no.

3) there's no fixed rule. quality rather than length of occupation matters, whatever that means.