Another capital gains question- sorry!

tiamaria

Will try to make this short but I'm looking for some advice please

Partner started to rent a property in 1994 from the council.

Bought this property,rented it out and moved in with me in 2005

Property now worth £80k approx more that when he bought it.

Next year we have to decide whether to sell it or keep renting it.

Am I right in thinking he will not be liable for CGT as it was his PPR for 11 years and the last 3 years are exempt?

If he continues to rent it for the next year or two will this result in him getting a hefty CGT bill when he does sell or would it be just a negligible amount?

We are wondering whether to buy a better property between us or keep renting his and getting a little bit more income

Would welcome your thoughts on this.

Tia

tiamaria

Edit - forgot to add

One of the conditions when he bought the property was that he could not sell it in the first 3 years (long story re. council). So he cannot officially sell it until 27.06.08 precisely. If we put it on the market then and it takes, say, a couple of months to sell, would he be liable for those months, would those few months make a great difference? Would it be advantageous to advertise it a couple of months beforehand?

Thanks

CLAPTON

tiamaria wrote: »

Edit - forgot to add

One of the conditions when he bought the property was that he could not sell it in the first 3 years (long story re. council). So he cannot officially sell it until 27.06.08 precisely. If we put it on the market then and it takes, say, a couple of months to sell, would he be liable for those months, would those few months make a great difference? Would it be advantageous to advertise it a couple of months beforehand?

Thanks

what do you mean ...he bought it in 1994 and can't sell for three years then he can sell in 1997 .. so what are you saying

tiamaria

Whoops - will edit that now.

tiamaria

Thanks so much for your reply, Jimmo.

The contract was exchanged on 27.06.05 and he moved in with me in the first week of August the same year so literally a matter of weeks.

The reason its come to mind now is that our tenant has given us notice and we need to decide whether we can let it for a year or more or just for the 7 months & then we sell.

Are you able to explain how the lettings relief works in very simple terms please?;)