The more I pay for a House the Less CGT I Pay

photoman4

Hello All
I understand that if I buy a property within a year of my sale of the old one that I can defer CGT and the more I pay for a property, the less CGT I pay. It seems crazy so here are the details.
Bought 1994 for £39,000. sold 2019 for £440,000 due to a fire and the freeholders not re-instating (apparently this fire element is tax relevant. (sec 23 TCGA 1992 which is beyond me).
Have I got this right?
Greetings

lincroft1710

Was this property at any time your sole or main residence?

00ec25

photoman4 wrote: »

Hello All
I understand that if I buy a property within a year of my sale of the old one that I can defer CGT and the more I pay for a property, the less CGT I pay. It seems crazy so here are the details.
Have I got this right?

not that part, no

you "roll over" the original purchase price on to the replacement asset
so if the replacement cost more than 440k, your purchase price of that asset for future CGT purposes is the original cost of 39k because the disposal of the property is treated on a no gain no loss basis

if the replacement costs less than 440k, that is where you have to make different allowance as explained in the legislation


off hand I am unsure if the legislation you reference applies to residential property or only to "business" assets because pure rollover relief itself is certainly not available to residential property

photoman4

Thanks for your reply, no it was only for letting.

photoman4

Thanks both of you I have some reading to do

photoman4

I am still trying! I think (only think) that the answer lies in sec 23 (4) and (5) of the TCGA 1992.
Where a conditional contract is agreed, ( ie I buy a property) I benefit from a "roll over" or "deferral".
Any clarification would be so much appreciated.

Regards

00ec25

photoman4 wrote: »

I am still trying! I think (only think) that the answer lies in sec 23 (4) and (5) of the TCGA 1992.
Where a conditional contract is agreed, ( ie I buy a property) I benefit from a "roll over" or "deferral".
Any clarification would be so much appreciated.

Regards

instead of exploring wild tangents please confirm what the property is!! The fact it was let tells us nothing beyond affirming CGT is liable.


commercial use? (warehouse, office, shop etc)
or
mixed use? (pub)
or
100% residential use?