CGT On Rental Property

MaritimeSE

Hi I was looking for some advice on the following CGT issue.

I own a second property which I bought in 2010 which I rent out. It has appreciated in value a great deal to the point that I will have a large CGT bill if I sell. As I only have one other property that I own (the house I live in), is there a way to reduce the CGT bill or get rid of it all together?

Thanks for any help!

G_M

errrrr... CGT is a tax on gains in value on anything other than a taxpayer's main residence (and some otther minor exceptions).

This does not appearr to be your main residence.

silvercar

Move into the rental for 6 months+.

MaritimeSE

Does 6 months living in the rental property automatically qualify the property for my residence and therefore excluded from CGT?

silvercar

Living in it as your home would mean you are exempt from CGT on the time it was your and the last 18 months of ownership. It also gives you entitlement to letting relief (google it for full info). So it will reduce your CGT considerably.

General view is that you need to live in the property fully (eg register with doctors/ notify home address to your work etc as well as actually live there) for at least 6 months for hmrc to accept it.

G_M

There's no set 'period' laid down. It's a question of fact as to whether it's your main residence. HMRC look at how long, whether the kids go to local school, where work is, doctors registration, DVLA and a host of other potential clues to help them reach a conclusion. 6 months is a guide to a minimum period though.