CGT when moving into a previously rented property

Cotswoldgeologist

We are about to move from our main residence (of 7 years) to a property we currently let as a holiday property.  We plan to rent out our main residence (residential let) for at least a couple of years before possibly selling.

Are we liable for CGT on the holiday property we plan to move into as we are 'disposing' of it for the purposes of ongoing tax? 

I assume we will be liable for CGT on the main residence when we sell it, so have a valuation on it for that purpose.

Any advice gratefully received.

lincroft1710

CGT does not become payable until a property is sold

_Penny_Dreadful

Cotswoldgeologist said:

We are about to move from our main residence (of 7 years) to a property we currently let as a holiday property.  We plan to rent out our main residence (residential let) for at least a couple of years before possibly selling.

Are we liable for CGT on the holiday property we plan to move into as we are 'disposing' of it for the purposes of ongoing tax? 

I assume we will be liable for CGT on the main residence when we sell it, so have a valuation on it for that purpose.

Any advice gratefully received.

You are not disposing of the property though. You will still own it. CGT may become payable when you do eventually sell the property and you will only receive PPR for the time it was your only or main home + the final 9 months of ownership under the current rules. 

You may also face a CGT bill when you come to sell your current residence that you plan to let as you will not be eligible for PPR for the entire duration of ownership and who know what allowances will be in place by the time you come to sell. 

theartfullodger

lincroft1710 said:

CGT does not become payable until a property is sold

And CGT will be charged at the THEN CGT rules and regulations.  I.E. You can currently only guess what the bill might be..

CGT will  (under current rules ) be due on both properties when they are eventually sold ... (or other change of ownership, )

lincroft1710

theartfullodger said:

lincroft1710 said:

CGT does not become payable until a property is sold

And CGT will be charged at the THEN CGT rules and regulations.  I.E. You can currently only guess what the bill might be..

CGT will  (under current rules ) be due on both properties when they are eventually sold ... (or other change of ownership, )

Thanks, i meant to add that. Who knows, CGT might have been abolished by then?

theartfullodger

Dream on.....

lincroft1710

theartfullodger said:

Dream on.....

Forgot to add

"...and replaced by a more pernicious tax!"

Slinky

I think you need to calculate what the income would be from letting your current home, and compare it with the potential CGT bill that it may then generate. You may find it doesn't make financial sense.