Capital Gains Tax on Second Property

Denise81

I bought a flat in 2001 for £40k and lived in it until 2017, when I bought a family house with my husband.  In 2017 I had it valued and put on the market for £125k however it didn't sell.  The local market has decreased in this time and I've now had an offer of £80k.  My question relates to capital gains tax as this has effectively been my second property since 2017.
Do I have a capital gains loss due to the reduction in value from when I moved out until now?  Or does the capital gain apply to the whole period of my ownership equally with an allowance for the 16 years I lived in it?

Thanks

[Deleted User]

Slightly wishful thinking on the gain apportionment! But good news!


 Let’s say you bought it in May 2001. You have owned it for 21 years or 252 months. 

Moving out in May 2017 means that it was your main residence for 192 months - add 9 months as it was your main residence at some point - relief is 201/252 of the gain of 40000. This equates to 31904 leaving 8096 chargeable.

You have an annual exemption of 12300 available so no tax to pay - and you could have deducted legal costs also. 

Jeremy535897

There is no valuation at the point the property ceased to be your main residence. The £40,000 gain will be reduced by buying and selling costs (and any improvements), and about 17/21 of the gain will be relieved by the main residence relief (your period of occupation as main residence, plus the last 9 months of ownership). With your annual exemption of £12,300 (unless used against other gains), it seems unlikely any tax will be due.

Denise81

Perfect, thanks.