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Declare second residence as primary primary residence for CGT purposes
Knicknack
Posts: 29 Forumite
Has anyone done this? Apparently you had to do so within 2 years and if not then HMRC would decide for you. I'm wondering if it's worth bothering or not. I plan on asking a solicitor next month but was curious if anyone else here did this.
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Have you ever actually lived there?0
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Has anyone done this? Apparently you had to do so within 2 years and if not then HMRC would decide for you. I'm wondering if it's worth bothering or not. I plan on asking a solicitor next month but was curious if anyone else here did this.
well it's worth bothering with if it's worth more (or more correctly if the likely gain is going to be higher)
there aren't any other reasons0 -
plenty of people have done it. What is your actual question???
if it is now more than 2 years since you had the second property then it is too late and there is no need of further discussion about making the election as you cannot.
where you actually live now will be your main residence and you cannot change that as it is "a matter of fact" which is what HMRC will "decide" (as you put it).0 -
Which one do you actually live in?
I'm sure you wouldn't really be planning to lie in order to avoid paying tax that you're actually required to pay, would you?0 -
It seems it's as simple as writing a letter to HMR or making a phone call. Was just asking, if anyone else here had done it, of it was as simple as that. For example a solicitor isn't even required from what I gather.0
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Yes. It's a second residence. Not a BTL or anything like that.Bob_Bank_Spanker wrote: »Have you ever actually lived there?0 -
Yes. It's a second residence. Not a BTL or anything like that.
Then it really is as simple as writing to them.
https://www.gov.uk/tax-sell-home/nominating-a-home
You can't get exemption for two houses, so you open yourself up to CGT on your "first" residence.
I would be surprised if a high street solicitor could give more than the mechanics of how this works, if you need proper tax planning advice I would go and see an accountant.0 -
in order to nominate you must have physically occupied the second property as your main home at some point in order for it to qualify as a "residence" which you can then nominate as your "main" residence.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64465
Note that the 2 year time clock is not based on date of purchase, it is based on date of use:
Where a dwelling house is acquired, the date on which there is a new combination of residences will not necessarily be the date of acquisition, it will be the date on which the dwelling house was first used as a residence. Similarly, where an individual ceases to use a dwelling house as a residence, the date on which there is a new combination of residences will be the date on which the dwelling house is no longer used as a residence, it will not necessarily be the date on which that dwelling house is disposed of.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64495
as others above have said, occupation as your main residence is checked by reference to lots of indicators of how you used the property in the time you occupied it. Simply using it as a holiday home is absolutely not going to work! There is now plenty of case law which has established that "degree of permanence, continuity or expectation of continuity" can be used to justify describing that occupation as ‘residence’.”
if you wish to understand this from a DIY perspective please read all of the links on this page...
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64420p0
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