We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Capital Gains Tax
Scottie48
Posts: 16 Forumite
A house that I have lived in for 28 years has now become my second home. If I were to sell now I would make a gain that would be subject to Capital Gains Tax. As it was my main home for 28 years are there any further tax concessions to be had? Thank you
0
Comments
-
Has it only just become your second home? If you've lived in it for 28 years and only just moved out, then if you were to sell it today you wouldn't have to pay any CGT at all. See https://www.gov.uk/tax-sell-home/absence-from-home for an overview.
1 -
Hi Annisele, many thanks for your reply. Yes it's only just become my second home and I had considered perhaps going down the letting route but presumably then Capital Gains would kick in and what with all the rules and regulations of letting I'm not so sure I want the hassle0
-
I've been giving this a lot of thought and am now considering letting the property for a minimum of at least 5 years, what would be the implications of this regards CG Tax etc, thank you0
-
Scottie48 said:I've been giving this a lot of thought and am now considering letting the property for a minimum of at least 5 years, what would be the implications of this regards CG Tax etc, thank you
The implication is that when you come to sell the property, then (assuming the CGT legislation is as it is now) there may be CGT due. There are CGT calculators around that would let you plug figures in - but broadly speaking, they consider how much the house has risen on value between buying and selling it, and the proportion of time where it was and was not your main residence.
2 -
If you did this it would be subject to CGT but you would get relief for the period you lived in it (plus the last 9 months of ownership based on current rules), so whatever your gains are you would effectively pro rata that for the period you let it out. Quick worked example below:Scottie48 said:I've been giving this a lot of thought and am now considering letting the property for a minimum of at least 5 years, what would be the implications of this regards CG Tax etc, thank you
SAY:
Purchase price £100,000
Sale Price £310,000
Gain = £210,000
Buying/selling costs say £10,000
Total "profit" = £200,000
Lets say you lived in it for 28 year 0 months
Rented it out for a subsequent 5 years 0 months
You would have owned the property for 396 of which you would be able to claim relief for 345 months (28yrsx12 months + final 9 months of ownership)
Therefore from your £200,000 profit £174,240 would be subject to relief leaving you with £25,760.00 which would be subject to tax. You then have a £12,300 tax free allowance (assuming you have no other CGT to declare in that year) so £13,460 would be taxable which will either be at 18% (£2,422.80) or 28% (£3,768.80) depending on whether you are a higher rate tax payer or not.
More detail at the link below including various working examples.
https://www.gov.uk/tax-sell-property
2 -
Just to add to the above as well as CGT when you eventually sell, there are of course also income tax implications that you will need to consider.0
-
Ok, but what would happen if the poster doesnt let the property out, but it takes say 3 years to sell, out of interest?0
-
Then they would have a larger CGT liability. Whether or not this means that they have any CGT to pay depends on the figures but might still fall under their personal allowance.
0 -
Hi All
my question is, In 1989 I bought a house for my elderly mum to live in sadly she as now passed away,
I know I will have to pay CGT when I sell this property but are there any tax deductions I can make due to a relative living in the property? I have never lived in the property.0 -
PaulWenban said:Hi All
my question is, In 1989 I bought a house for my elderly mum to live in sadly she as now passed away,
I know I will have to pay CGT when I sell this property but are there any tax deductions I can make due to a relative living in the property? I have never lived in the property.
There used to be dependant relative relief, but I think that was phased out in 1988.No reliance should be placed on the above! Absolutely none, do you hear?0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.1K Banking & Borrowing
- 254.3K Reduce Debt & Boost Income
- 455.3K Spending & Discounts
- 247.1K Work, Benefits & Business
- 603.7K Mortgages, Homes & Bills
- 178.3K Life & Family
- 261.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards