Planning ahead to minimise CGT

RubyBish

I currently have a flat which I have lived in for 2.5 years and for the last 3 months has been rented out.
I now live in rented accomodation elsewhere.

If I now purchase a property to live in what would be my CGT exposure be if I then:

a) Sold my original flat
or
b) Sold my new flat to upgrade.

Also would doing either of these within 3 years of moving out of orignal flat make a difference?

TIA

Rafter

TIA,

If you sell within 3 years of moving out there is no CGT liability.

If you own two properties you can elect which one is your principle residence (even if you don't live in it) I believe. So you could elect for the flat you own to be your principle residence, even though you are renting elsewhere I believe.

So....

a) If within 3 years of moving out - no problem.
If after 3 years and not elected as principle residence pay tax (be aware of various reliefs and exemptions though - the bill may not be too scary, unless prices keep rising at rates in the last 3 years. I believe you only pay on gain since you started renting, so if old flat has appreciated a lot since you bought it and while it was your only home, CGT will never be payable on this portion of the gain.

b) If new flat is elected as principle residence then no CGT. If old flat is elected as residence, then pay GCT on gain from new flat.

Hope that helps.

R