Capital Gains Tax because of house sale overlap

didgemaster

I have had an offer accepted on a house and the sale is progressing. I was able to buy the house as a cash buyer, I have inheritance and my family have leant me their life savings!! I have sold my current home and the sale of that is also going through. There will be a short period of time where I will own both houses. As soon as the sale of my current house has gone through I will mortgage the new house and pay the loans back to my family leaving me with my new home and a substantial mortgage. I realise that I will have to pay a higher rate of stamp duty as the new house will technically be a 2nd property for a short period but once my current house is sold I will be able to claim that back. What concerns me is Capital gains tax. Will I be liable to it as technically I will be selling a house as I will have moved home?

didgemaster

I think I may have the answer here Capital Gains Tax (herrington-carmichael.com) there seems to be an exemption for a 9 month period when moving home. Should have googled more before posting - maybe this post will be useful for someone else in my situation :-)

Pennywise

didgemaster said:

I think I may have the answer here Capital Gains Tax (herrington-carmichael.com) there seems to be an exemption for a 9 month period when moving home. Should have googled more before posting - maybe this post will be useful for someone else in my situation :-)

Even if the "dual" period exceeds 9 months, you're highly unlikely to have a CGT liability as it's time apportioned.  So you'd only have a "chargeable" gain of the number of months you've gone over the 9 months allowed, as a proportion of the total period of ownership.  So if it takes 18 months of "duality" and you've owned it for 12 years, the "gain" is only 9/144ths of the total "profit" so highly likely to be within your annual CGT allowance.  (Unless you've rented it out or lived elsewhere during ownership which may mean you had another period when it wasn't your "home").