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Capital Gains on Buy to let formerly PPR

We have owned a property for 14 years and now looking to sell.  We lived in the house for 10 years and then switched to buy-to-let mortgage and have been renting it out for 4 years.  Should CGT be calculated on the profit we have made over the 4 years (based on the valuation at the time we changed the mortgage to buy-to-let) or over the full 14 years? If the latter, is there any relief from CGT since most of the time it was our main residence?  I found a post from 2006 with a similar question but I'm guessing things may have changed.

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  • [Deleted User]
    [Deleted User] Posts: 3,297 Forumite
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    Ceebrad said:
    We have owned a property for 14 years and now looking to sell.  We lived in the house for 10 years and then switched to buy-to-let mortgage and have been renting it out for 4 years.  Should CGT be calculated on the profit we have made over the 4 years (based on the valuation at the time we changed the mortgage to buy-to-let) or over the full 14 years? If the latter, is there any relief from CGT since most of the time it was our main residence?  I found a post from 2006 with a similar question but I'm guessing things may have changed.
    The gain is based on the value at the time you bought the property and the value when you dispose of the property. You will get Private Residence Relief for the time it was your only or main home plus the final 9 months of ownership. Each owner also has a CGT allowance of £12,300 for the 2021/22 tax year. 
  • saajan_12
    saajan_12 Posts: 5,152 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Valuations aren't used because not everyone gets them done and it would be much too easy to skew. An actual sale price is tested by the market. Also you say "we" own - if its more than one owner, calc the below for each person's 50% share. The main benefit of this is the 12.3k allowance is for each person, so effectively gets used twice between you. 
    Gain = Sale price - Purchase price - Costs (to buy & sell eg sols, agents etc) for each owner's share
    Owned for: 14 years = 168 mths
    Private residence for: 10 years + last 9 months = 129 mths
    PPR for 129/168 months = 76.8%, so the portion without relief is 100%-76.8% = 23.2%
    Annual allowance = 12.3k for each owner (only for the year you make the sale)

    So each owner's taxable gain = Gain above x (100% - 76.8%) - 12.3k 
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