Capital Gains Tax

chipsdog5a

I haven’t sold my house, but found my dream home, I can pay cash for the dream home,but will need to sell old home.  Will I pay capital gains tax?  Or is there a way of claiming back like you can with stamp duty.  Thank you 

Flugelhorn

when you sell your old home there is a time period where because it was your main residence there will be no CGT - it is 9 months according to this https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2024

"Your period of ownership begins on the date you first acquired the dwelling house, or on 31 March 1982 if that is later. It ends when you dispose of it. If you acquire land on which you build a house, your period of ownership begins at the time the dwelling-house comes into force. The final 9 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as the dwelling house has been your only or main residence at some point."

Bookworm105

as above, you have 9 months after the date you ceased to live in it as your main home in which it is still exempt from CGT

once the 9 months are up it becomes liable for CGT but you will always get exemption for the period when it was your main home 

lots of guidance explaining how this works,  here is a basic start point :
Tax when you sell your home: Private Residence Relief - GOV.UK (www.gov.uk)

HS283 Private Residence Relief (2024) - GOV.UK (www.gov.uk)

Brie

On this basis I assume that you might buy your dream home but remain resident for a few months in your old place while you renovate or whatever thus kicking the CGT date along a bit.

silvercar

Brie said:

On this basis I assume that you might buy your dream home but remain resident for a few months in your old place while you renovate or whatever thus kicking the CGT date along a bit.

I never thought if this before. It isn’t that unusual for people to do up a house before moving in, so there should be potentially CGT on the gain when it’s sold. I’ve never heard people say on selling such a house after say 15 years that they have CGT because they spent some time doing it up before moving in. Plenty of people near me where FTBs buy somewhere a bit scruffy as that is what they can afford and continue to live with their parents while they do it up evenings and weekends before moving in. 

Bookworm105

silvercar said:

Brie said:

On this basis I assume that you might buy your dream home but remain resident for a few months in your old place while you renovate or whatever thus kicking the CGT date along a bit.

I never thought if this before. It isn’t that unusual for people to do up a house before moving in, so there should be potentially CGT on the gain when it’s sold. I’ve never heard people say on selling such a house after say 15 years that they have CGT because they spent some time doing it up before moving in. Plenty of people near me where FTBs buy somewhere a bit scruffy as that is what they can afford and continue to live with their parents while they do it up evenings and weekends before moving in. 

the rules changed in April 2020 
since then you now get 24 months in which you can own a property you intend to occupy as main home but have not yet moved in, as it is undergoing "works"
CG65000 - Private residence relief: delay in taking up residence: Disposals on or after 6 April 2020 - HMRC internal manual - GOV.UK (www.gov.uk)

(prior to 2020 the time limit was 12 months)
doubtless there are people who break the rule and don't get caught. Living with parents not being a good example though as they would, on paper, only own 1 property so nothing to trigger a CGT enquiry.