Selling Flat Capital Gains?

foiegras

Hi there. My girlfriend bought a flat about 10 years ago and lived in it for a few years. She was going to sell it but the financial crisis happened so she let it out instead. We then both moved into a bigger rented flat. We now want to sell and buy somewhere else. Will she get hit for capital gains for the period it was let out?

Many Thanks,
Mike

G_M

https://www.gov.uk/tax-sell-property

foiegras

Thanks but its still not 100% clear. I read this

"What counts as your home
You must have lived in your home as your only or main residence at some point while you owned it."

So that is true, she did buy it to live in and at that point it was her main residence.

We're also fixing this house up. I'm worried that the any value we add back to the property will just get sucked up in capital gains. Are we just spending cash to pay the tax man.

booksurr

read this and particularly #6 then follow steps 1 - 5 to work out the liability
https://forums.moneysavingexpert.com/discussion/5315071

as for fixing it up it depends on whether the expenditure is for repairs (cannot be offset) or for improvements (can be offset against CGT), and do please realise that CGT is a % based tax at worst 28% so you will always be left with the other 72% as cash in hand

foiegras

Think she needs to get some financial advice. I'm wondering if she makes it her primary residence now and gets a valuation done while it is still in a mess then fixes it up she would avoid tax between the current value and the renovated value?

The work she is doing is new kitchen, bathroom and decorating. I don't think that can get offset against CGT. I might be wrong.

booksurr

foiegras wrote: »

Think she needs to get some financial advice. I'm wondering if she makes it her primary residence now and gets a valuation done while it is still in a mess then fixes it up she would avoid tax between the current value and the renovated value?

please read the thread I linked to as it is obvious you have no idea how CGT operates

G_M

foiegras wrote: »

Thanks but its still not 100% clear. I read this

"What counts as your home
You must have lived in your home as your only or main residence at some point while you owned it."

So that is true, she did buy it to live in and at that point it was her main residence.

Read the links in the HMRC guidance for fuller details

Or for real guidance, read the HMRC internal manual....

http://www.hmrc.gov.uk/manuals/cgmanual/CG64650+.htm

foiegras

"please read the thread I linked to as it is obvious you have no idea how CGT operates"

Correct. And thanks for the link.

So from what I understand from that is

Buying/Selling fees deducted
"Private Residence Relief" for the period she lived there
"Letting Relief" for the period she rented it out
personal allowance £11,100

If anything is left after that is all deducted it would then be paid at 18% or 28% tax depending on her income.

Think I've been worried about nothing.