Capital Gains Tax query potential second property sale

dougens

Hello

Here is my situation:

I bought my house (A) in 2012 for £156,000 and it was my main residence until January 2018. It is now valued at £190,000.

I bought another house (B) in January 2018 and this is my main residence since purchase and will remain to be.

House A is for renting and House B is for my residence. We have not had anyone rent house A yet. House A is planned for our pension pot, in the hope that by retirement the mortgage will be paid off and we have the rental income once retired.

I obviously paid the extra Stamp duty on purchase of house B as it is classed as a second home.

My questions are:

If I sold house A what would I be paying in Capital Gains tax?

Will I get the extra stamp duty paid back if I sell house A within two years of puchase of house B?

This is not the plan but we are struggling to get a rental in house A currently and wanted to know what our options are if this become an ongoing issue.

Thanks for any answers, advice

Badger50

If you sell house A within 18 months of January 2018 there would be no CGT to pay.

00ec25

read my 5 step guide to CGT in respect of a property that is now let that was once your main home.

https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

It explains the mechanics of the CGT calculation and obviously you should adjust the tax allowances and rates for the year you sell.


if you wish to do the maths yourself after reading the above (using months not years please) and post your calculations on here someone will doubtless check if you have done it correctly

SDLT_Geek

dougens wrote: »

I obviously paid the extra Stamp duty on purchase of house B as it is classed as a second home.

Will I get the extra stamp duty paid back if I sell house A within two years of puchase of house B?

If house B is in England then you should be able to recover the 3% SDLT surcharge if you sell house A within three years of the completion of your purchase of house B.

SDLT_Geek

Have you double checked that the 3% surcharge was due when you bought house B in January 2018? Since buying house A in 2012 did you sell / dispose of another property which you used to live in?


There are sometimes cases like this where one's "property owning history" can mean the higher rates of stamp duty land tax for additional properties were not due.

dougens

SDLT_Geek wrote: »

If house B is in England then you should be able to recover the 3% SDLT surcharge if you sell house A within three years of the completion of your purchase of house B.

Yes the house is also in England. Thanks for your reply, I thought I had read two years but three is even better, buys a bit more time.

dougens

SDLT_Geek wrote: »

Have you double checked that the 3% surcharge was due when you bought house B in January 2018? Since buying house A in 2012 did you sell / dispose of another property which you used to live in?


There are sometimes cases like this where one's "property owning history" can mean the higher rates of stamp duty land tax for additional properties were not due.

Thanks for you reply. I can only hope that my solicitor was advising me correctly. I will check on this.

No since buying house A in 2012 I didn't sell / dispose of any other property.

Can you advise on how best to check whether I have overpaid? When I checked with numerous SDLT calculators and research I didn't come across and discussion or statement saying I wouldn't have to pay the higher rate....it would be nice if this was incorrect and refundable!

dougens

00ec25 wrote: »

read my 5 step guide to CGT in respect of a property that is now let that was once your main home.

https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

It explains the mechanics of the CGT calculation and obviously you should adjust the tax allowances and rates for the year you sell.


if you wish to do the maths yourself after reading the above (using months not years please) and post your calculations on here someone will doubtless check if you have done it correctly

Thanks for your reply. I will do this.

SDLT_Geek

dougens wrote: »

Thanks for you reply. I can only hope that my solicitor was advising me correctly. I will check on this.

No since buying house A in 2012 I didn't sell / dispose of any other property.

Can you advise on how best to check whether I have overpaid? When I checked with numerous SDLT calculators and research I didn't come across and discussion or statement saying I wouldn't have to pay the higher rate....it would be nice if this was incorrect and refundable!

It sounds unlikely that your property owning history will save you from the higher rates of SDLT if you did not sell / dispose of another property since your 2012 purchase completed.