Keeping existing home while renovating new home

Bookworm105

Rodders53 said:

Google tells me this...  https://community.hmrc.gov.uk/customerforums/cgt/aca15728-96d4-ee11-a81c-0022481aac05

So you need to complete within 9 months of moving out of home 1 into 2 to avoid a potential Gain.

you needed to google further ....

when you buy a property but are unable to move into it because of "works" needed on it you are given a 24 month period where you have private residence relief on both the house you continue to live in and newly purchased property. 

obviously certain conditions must be met to allow such a claim 
CG65000 - Private residence relief: delay in taking up residence: Disposals on or after 6 April 2020 - HMRC internal manual - GOV.UK

RAS

The tax consequences are, essentially.

If she already owns one or more properties she pays the additional SDLT, unless selling her old home at the same time as or before moving into a new home. She can reclaim this within 3 years.

If she moves out of her old home before it is sold, and it remains unsold 9 months later, she pays CGT on a small portion of the gain since she bought the house. So if it took 21 months to sell and she'd owned it for 20 years, CGT on 5% of the uplift.

Flower1976

RAS said:

The tax consequences are, essentially.

If she already owns one or more properties she pays the additional SDLT, unless selling her old home at the same time as or before moving into a new home. She can reclaim this within 3 years.

If she moves out of her old home before it is sold, and it remains unsold 9 months later, she pays CGT on a small portion of the gain since she bought the house. So if it took 21 months to sell and she'd owned it for 20 years, CGT on 5% of the uplift.

Thank you for replying 😊

user1977

Are the tax consequences crucial to her decision about whether to do this or not? Bear in mind CGT is only ever on a gain! You still get to keep most of that...

Flower1976

user1977 said:

Are the tax consequences crucial to her decision about whether to do this or not? Bear in mind CGT is only ever on a gain! You still get to keep most of that...

No, just want to ensure we have the facts so she can make a more informed decision.

Bookworm105

Flower1976 said:

RAS said:

The tax consequences are, essentially.

If she already owns one or more properties she pays the additional SDLT, unless selling her old home at the same time as or before moving into a new home. She can reclaim this within 3 years.

If she moves out of her old home before it is sold, and it remains unsold 9 months later, she pays CGT on a small portion of the gain since she bought the house. So if it took 21 months to sell and she'd owned it for 20 years, CGT on 5% of the uplift.

Thank you for replying 😊

@flower1976 except in the context of your opening post the above comment re CGT is not what would apply in your case

My other post that you apparently ignored explains that actual CGT situation 

Flower1976

Bookworm105 said:

Flower1976 said:

RAS said:

The tax consequences are, essentially.

If she already owns one or more properties she pays the additional SDLT, unless selling her old home at the same time as or before moving into a new home. She can reclaim this within 3 years.

If she moves out of her old home before it is sold, and it remains unsold 9 months later, she pays CGT on a small portion of the gain since she bought the house. So if it took 21 months to sell and she'd owned it for 20 years, CGT on 5% of the uplift.

Thank you for replying 😊

@flower1976 except in the context of your opening post the above comment re CGT is not what would apply in your case

My other post that you apparently ignored explains that actual CGT situation 

Definitely not ignored. I’m very grateful for all the replies.

lincroft1710

Your mother will also have to pay Council Tax on both properties and if a property has been empty for more than a year, double CT can be charged. 

Flower1976

Thank you, she’s decided against it now.