Partial Capital Gains Tax

arturski

Hi I have an opportunity to move to the Netherlands for work which I am strongly considering but my mortgage still has about 18 months left.

I thought about renting it out but reading on the gov.uk website tells me I will have to pay a capital gains tax when I do decide to sell once the mortgage runs out because I did not live in it the whole time.

There is a clause in there on a partial capital gains tax but it in no way instructs on how it is worked out and what are the conditions. Has anyone experienced this before if so could you give any kind of indication on the numbers?

I am kind of stuck because I am not sure if I should sell and pay the early repayment fee or rent out and pay the capital gains tax :undecided

booksurr

arturski wrote: »

Has anyone experienced this before if so could you give any kind of indication on the numbers?

rather a lot of people have experienced it :rotfl:

read this example
http://forums.moneysavingexpert.com/showpost.php?p=69071134&postcount=6

Bluebirdman_of_Alcathays

There are lots of variables - at this point in time we don't know what (if any) the appreciation will be on the property - amongst a whole lot of other things. You need to spend some time with an Accountant who can crunch through various scenarios with you.


Not sure what booksurr finds funny about it - he/she seems to delight in others knowing less than them. As a fellow Chartered Accountant I doubt they would behave like they do on the internet in real life with clients - perhaps a definition of troll. Sigh.

antrobus

arturski wrote: »

...I thought about renting it out but reading on the gov.uk website tells me I will have to pay a capital gains tax when I do decide to sell once the mortgage runs out because I did not live in it the whole time....

The gain will be time apportioned. The last 18 months of ownership is exempt from CGT. You have a CGT allowance of £11,100.

It would depend on how long you'd owned the property, but if you rented it out for 18 months and then sold it, it's unlikely that you would have to pay any tax.

[Deleted User]

[QUOTE=Bluebirdman of Alcathays;7068588


Not sure what booksurr finds funny about it - he/she seems to delight in others knowing less than them. As a fellow Chartered Accountant I doubt they would behave like they do on the internet in real life with clients - perhaps a definition of troll. Sigh.[/QUOTE]

Could not agree more!! Great advice from someone who clearly knows their stuff continually ruined by lectures and admonishments. Definitely on my 'ignore' list.

Keep_pedalling

If this is perminant move, I would sell up rather than have the hassle of being a landlord.

If you plan to come back to the uk after a few years then you should not have any CGT liability as you will get relief for both the period you lived there and your period of absence for work purposes.

https://www.gov.uk/tax-sell-home/absence-from-home

grey_gym_sock

Keep_pedalling wrote: »

If this is perminant move, I would sell up rather than have the hassle of being a landlord.

yes - i wouldn't let capital gains tax, or mortgage early repayment fees, influence you too much - there are bigger issues ...

if you're coming back, especially if you're likely to live in the same area again, it may make sense to keep your property. but if you're not, being a landlord, especially from another country, is a huge hassle; and what if you later want to buy a property in the netherlands - when you have your capital tied up in a UK property?