Tax on 2nd property

SGM1

Recently bought a house, and am now letting flat we previously lived in for 5 years. Read somewhere we have to name which is our main residence to the taxman within 2 years. If I delay this for a year is this period also tax free or does is not apply in this case

G_M

http://www.hmrc.gov.uk/manuals/cgmanual/cg64520.htm

http://www.hmrc.gov.uk/manuals/cgmanual/cg64525.htm

http://www.hmrc.gov.uk/manuals/cgmanual/cg64545.htm

The two year period for making the nomination commences on the date of marriage or the date of registration.

where a notice is not made, or an invalid notice is made, the residence which attracts relief is the dwelling house which is the main residence as a matter of fact. All of the facts and circumstances of the particular case must be considered in order to conclude which the residence is the main residence.
In practice the main residence is not necessarily the residence where the individual spends the majority of their time, although it commonly will be. This question was considered in the case of Frost v Feltham (55TC10) and the High Court decision in this case sets out a useful summary of the criteria to be applied. Nourse J comments in the decision,
“If someone lives in two houses the question, which does he use as the principal or more important one, cannot be determined solely by reference to the way in which he divides his time between the two.”

The following list of points to consider, although not exhaustive, may be useful in establishing which is the main residence,

• If the individual is married or in a civil partnership, where does the family spend its time?
• If the individual has children, where do they go to school?
• At which residence is the individual registered to vote?
• Where is the individual’s place of work?
• How is each residence furnished?
• Which address is used for correspondence?

• • Banks & Building Societies
  • Credit cards
  • HMRC

• Where is the individual registered with a doctor / dentist?
• At which address is the individual’s car registered and insured?
• Which address is the main residence for council tax?

Pixie5740

You're letting out your previous home so it's not your residence anymore. The only residence you have is the property you currently live in.

What sort of tax are you referring to?

SGM1

Pixie5740 wrote: »

You're letting out your previous home so it's not your residence anymore. The only residence you have is the property you currently live in.

What sort of tax are you referring to?

Ok thought I was wrong. I meant capital gains tax when you sell, if I could add that period on to the time I was living there

dimbo61

You lived in the flat for 5 years or 60 months !
If you sell property within 18 months No CGT to pay.
If you rent out property you have CGT allowance of £11,000 each if in joint names ?
Complex formula to work out Gain ( increase in value over period owned ) with allowance for period you lived in property.
Worked out on a monthly basis.
Ie owned property for say 100 months and value gone up by £50,000 or £500 a month ( must be London or south east )
Take off increase in value while you lived in property and your allowances 2X £11,000
I think the real figure is £10,900.
You pay tax on difference and it also depends if you are a higher rate tax payer.
Speak to an accountant