Moving back to the rental property

00ec25

J_forest wrote: »

If we sell A now, how to work out the CGT?

A was once your home, then was let, then before sale it may, or may not, once more be occupied by you as your home

if you complete the sale of A before April 2020 then please read this:
https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

if you sell in/after April 2020 the rules are slightly different - no letting relief and final period is 9 not 18 months

the rules in 10 years time could be vastly different

AnotherJoe

J_forest wrote: »

Hi Joe,

You cannot deduct anything you did while you lived in it. Stuff that was done for renting, there are rules. I dont know what they are but I am confident they dont include conservatory and solar panels !!!

Thank you for your new message. Now I understand that any house improvements that are not made during tenancy cannot be claimed. The reason that I asked was because I think the estimated house value (£230K) is mainly by the improvements we have made over the years plus slow house market price raising. If the government just takes a percentage out of the difference (£230K - £130K), it is not fair - whatever the house has been rented or not, all taxes have been paid.

Kind regards

Janet

I appreciate your point but tough luck , them's the rules, and thats what you signed up for when you became a LL along with all the other crud that goes with being a LL. The longer you stay at A after moving back, the more the % of time as a main residence will swamp out the gain.

J_forest

Okay... Have to forget about the solar panels too!

00ec25

J_forest wrote: »

Okay... Have to forget about the solar panels too!

that would be a mistake then

AnotherJoe wrote: »

I appreciate your point but tough luck , them's the rules,

what rules would those be then?

do you mean the fact you can deduct the cost of CAPITAL IMPROVEMENTS from a valuation for CGT purposes irrespective of whether the property was a main home or let at the time of the works? the fact it was let at all is key since that means CGT liability is established, but therefore the gain must be the gain taking account of all costs

as OP has quite correctly identified, the increased value is partly caused by "improvements" to their property. Those improvements had a cost, just the same as the original cost to buy the property in the first place. As such those costs are deducted from the gain

where your confusion lies, and OP will need help from a professional, is in being absolutely sure what is a CAPITAL cost compared to what is merely the repair of an existing aspect of the property.

capital v revenue fills whole chapters of tax manuals

here are 2 examples, both in the context of let property :
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15201

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2030