CGT on Primary (only) residence

Abergavenny01

If I sell my primary and only residence and don't buy another property within 12 months, am I subject to CGT? I have heard that the rules changed in 2023 to also include your primary residence. Thankyou

p00hsticks

Assuming that it has been your primary residence for the entire period of ownership, then under the current legislation no you won't. 

user1977

Abergavenny01 said:

I have heard that the rules changed in 2023 to also include your primary residence.

Where did you hear it? Might help us to explain any confusion.

Abergavenny01

A friend has just sold his primary residence and has been advised that if he doesn't purchase another property within 12 months, he is liable for CGT.  We are not sure if this information is correct. I have looked on the government CGT website and it is very unclear. Thankyou

user1977

Who "advised" him? It's either wrong advice or he has misunderstood something.

p00hsticks

Abergavenny01 said:

I have looked on the government CGT website and it is very unclear. Thankyou

Seems pretty clear to me - from Tax when you sell your home: Private Residence Relief - GOV.UK (www.gov.uk)

You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

• you have one home and you’ve lived in it as your main home for all the time you’ve owned it
• you have not let part of it out - this does not include having a lodger
• you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)
• the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
• you did not buy it just to make a gain

If all these apply you will automatically get a tax relief called Private Residence Relief and will have no tax to pay.  

Abergavenny01

Thankyou fpr the detailed reply. That is really helpful.

theartfullodger

Abergavenny01 said:

If I sell my primary and only residence and don't buy another property within 12 months, am I subject to CGT? I have heard that the rules changed in 2023 to also include your primary residence. Thankyou

Sorry to disagree but that depends on the CGT rules when you sell.. and we, you, me etc etc don't know what those rules will be.. 

Bookworm105

Abergavenny01 said:

A friend has just sold his primary residence and has been advised that if he doesn't purchase another property within 12 months, he is liable for CGT.  We are not sure if this information is correct. I have looked on the government CGT website and it is very unclear. Thankyou

nothing unclear about that statement, it is just plain wrong

if you sell a property which has always been your main residence for the entire time you owned it you will NEVER be liable for CGT on it 

your friend appears to be either out of date or confused

up until April 2020 there was a "concession" that meant you had up to 12 months exemption from CGT on the purchase of the new house if you were unable to immediately occupy it after purchase because works were underway. That concession was abolished wef 6 April 2020 
The concession has been replaced with the "final 9 months" rule meaning that if you move out of your main home it remains exempt for a further 9 months to give you a breathing space in which to complete the sale in the circumstances where you were able to buy a new property and move into it without having completed the sale of the old one 

When selling a business asset the 12 month rule still applies (but your home is not a business asset!) you have 12 months from that date of sale to purchase a replacement asset to claim "holdover relief" on the CGT that was due on the sale of the first asset - ie you kick the can down the road rather than paying the tax there and then