Offset capital gains

stamp_duty

Hi All,

I'm planning to transition to a buy to let mortgage and start renting out the house that I currently live in. I am wondering if (when I come to sell then house) I will be able to offset the money I have put into the house while living there with it as my primary residence (renovation work) against the potential capital gains tax I will be liable to pay in the future given I am turning the property into effectively a buy to let.

I know you can make allowances for such renovation investments made on a buy to let - I'm just unsure here because the renovations were done while the property was my primary residence. Any help would be VERY MUCH appreciated - cheers. 

Cheers.

Jeremy535897

It doesn't matter when the renovations are done. Providing they qualify (for example an extension) you deduct them from the gross gain like you deduct the original cost, and then apply the appropriate fraction for main residence relief.

stamp_duty

ah awsome - thank so much it really helps - do you have a link to anywhere where this is further explained? Cheers

Jeremy535897

See https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2021
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15180
https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax