Capital Gains Tax pickle - advice please

kissprudence

I bought a house in 2003. In 2012 I moved out of this house and into rented accommodation to be closer to work. In 2011/12, I tried for 18 months to sell the house but never had an offer despite knocking almost 10% off the valued price. The house I own has been tenanted from when I moved out until present day.

In two years time, I want to go travelling for 6 months. When I get back I want to sell the house. This house has not been my 'main residence' since October 2012. I think there is £25-30k of equity in the house. I know that the first £10k is tax free so I am looking at approximately a £4k tax bill (basic rate tax payer). I was wondering if there are any things I can do to reduce my CGT bill? A friend who works in tax said that I could ask my tenant to move out before I go travelling and before I go away I could change all the bills into my name. When I come back, she said I should live there for a minimum of three months and that may be ok although apparently the law is hazy when it comes to how long someone should live in a house for it to be classified as their main residence for CGT purposes. I really don't want to move back into the house and live there for a long time. It is not near work and the area has really gone downhill in the last decade. I just want to sell it so that I can buy again in an area in which I am now settled and I love.

Does anyone have any advice/ experience about the above?

PS please could people be nice/ respectful when they reply. I have posted a couple of times before on different issues and people can get really aggressive for no reason
PPS before anyone chips in YES - the house is rented out completely above board. I have permission from the building society, a signed tenancy agreement, the tenants deposit is protected with DPS, full landlords insurance yadda yadda

amnblog

Have you looked at this:


https://www.gov.uk/tax-relief-selling-home

kissprudence

So according to that calculator, there is a grace period of up to 5.5 years living away from the house you want to sell. So I'm pushing it a bit as I will not be back from travelling by then.

This clause is quite vague:
"You normally need to live in your home again afterwards, unless your job means you can’t go back"
How would this be calculated? My work is 15 miles away from my old house but that takes 1.5 hours in rush hour! (currently I live 2.5 miles away and it takes 15 mins)

sheramber

you would be better posting in the cutting tax forum.

http://forums.moneysavingexpert.com/forumdisplay.php?f=22

getmore4less

Start with getting your "tax expert" friend to go through the real numbers for their proposal.

No expert but I understand the basics are

You lived in it for 8-9 years
you let for say 6 years when you get back from travel
last 18 months relief.

PRR, lettings relief and annual allowance will take care of quite a bit of gains.


Seems a bit silly giving up rent for a period that likely to be exempt anyway.