Capital gains tax

stevebass56

I have already posted this under another section, but I think this might be more approprate section on the Forum.

Hi everyone.
I'm new to the forum and this is my first post/question.
My wife and I will be downsizing to a smaller property. There will be quite a few £k's surplus. Am I right in thinking we are liable for Capital Gains Tax ?
Most of the surplus cash will be used for home improvements on the new property.
Where is the best place to put the cash for about 6 months to avoid(legally) paying Capital Gains or any other Tax.
I'm thinking Premium Bonds.
Any advise will be gratefully excepted.
Steve

pawlala

stevebass56 wrote: »

Am I right in thinking we are liable for Capital Gains Tax ?

not necessarily, if your current property is your main home you won't be liable for CGT.

booksurr

if you sell a property which was your main/only home from the day you bought it to the day you sold it you are not liable for CGT at all. If during its ownership you did not live in it as your main home you may be liable. If it was never your main home you are liable.

So, why do you think you are liable?

tax is about details so we need some from you before an answer can be given which is certain to your circumstance

ViolaLass

And if you did owe CGT, stashing it in the bank or elsewhere wouldn't stop you from owing it.

stevebass56

Hi Booksurr
I thought any profit made on a property were liable to CGT. So am I correct in thinking CGT is only due on a property I own but is not my main residence ?

Bluebirdman_of_Alcathays

stevebass56 wrote: »

Hi Booksurr
I thought any profit made on a property were liable to CGT. So am I correct in thinking CGT is only due on a property I own but is not my main residence ?

No - not every property is subject to CGT. There are a number of reliefs available, the foremost being PRR - Private Residence Relief. If the house has been your main residence for the entirety of your ownership, no CGT will be due.


If your thinking were correct, most people you know would have paid CGT at some point in their lives. As it is, if you stopped 100 people in the street I doubt more than 2 would have even heard of it, let alone paid it.

booksurr

stevebass56 wrote: »

Hi Booksurr
I thought any profit made on a property were liable to CGT. So am I correct in thinking CGT is only due on a property I own but is not my main residence ?

have you read the basics yet? I won't agree with your thought because you have not given your circumstances and as said, tax is about rules applicable to specific details, not generic statements.
https://www.gov.uk/tax-sell-property/what-you-pay-it-on

as explained by Bluebird, you get a range of relief for certain periods where certain conditions are met. That relief could mean your liability is reduced to zero so you pay no tax on your gain depending on your details.