renting family home; CGT liability after 3 yrs??

fc123

Hi, have waded through HMRC but found nothing specific....can anyone help with a simple Q?
We have rented out our family home since Jan 06 as we re-located for work.
We rent a house in our new location.
I have heard of a CGT liability (I can't remember where either) if one rents out own house for 3 yrs or more EVEN though one doesn't own a second property.

We were going to sell in Feb 08 and buy new home in new location BUT thanks to N Rock etc etc...seems the timing is out............however, postponing selling for another yr (and keeping tenants who wish to stay) takes us to 3 yrs.

Anyone know the full SP on this?

Thanks in advance

EdInvestor

You'll get the last 3 years of ownership free, and also "letting relief" as it was your PPR, up to 40k on top .Shouldn't be anything to pay.

silvercar

Your exempt for the time it was your PPR and the last 3 years of ownership. Any liability is calculated on the proportion of the gain in the remaining time period. Once you also allow for letting relief and CGT allowances of £9,200 each, there may be no CGT to pay.

fc123

EdInvestor wrote: »

You'll get the last 3 years of ownership free, and also "letting relief" as it was your PPR, up to 40k on top .Shouldn't be anything to pay.

Thanks! ps what is letting relief?

CLAPTON

it work likes this (assuming next year)

-work out gross gain (selling minus buying less costs)
-then work out in month total period of ownership
-It is assumed that the gain is even over the period of ownership

because it was your principal private residence for part of the time and let for the rest you get two allowances

- PPR allowance which is the period of ownership plus 36 months
- letting relief which is the lesser of
a. the gain whilst let
b. the gain while your PPR
c. 40,000

and of course you have your personal CGT allowance of 9,200... if its jointly owned then you both can use your 9,200


so you wil probably have nothing to pay.