BTL mortgage changed to residence mortgage, still subject to CGT if sell in same financial year?

Ralphie123

Hello 

I was wondering if someone could advise or guide me where the guidance is on the following: 

I am looking to sell my current main residence and then move into my BTL property. I don’t have any other properties. I will change it to residential mortgage and have been advised that this should be ok. Where I am coming stuck on is will I be subject to CG Tax if I sell the changed BTL property to residential property in the same financial year as my current residence property or is there a period of time that needs to lapse before I could sell it or will I still be subject to CG tax irrespective of when I sell it.

Appreciate any guidance.

thanks

njkmr

I'm pretty sure if you have two properties then one of them will attract CGT whichever way you go about selling them.

Hoenir

There'll remain a potential liability for CGT for the period of time the property was let. 

silvercar

For any residential property, you would be exempt for the time it was your principal residence plus the last 9 months of ownership. There are also exemptions if you were getting a property ready to live in when you first took ownership and then did so, or you moved out while preparing what was your home for sale and then sold. A married couple can have only one principal residence between them at any one time.

silvercar

Move and sell your current home within 9 months, then assuming it has always been your residential home there won’t be any CGT on sale.

For the former BTL, if you sold at any time after moving in there would be a calculation needed. (Total time it was your home plus the last 9 months of ownership) / Total length of ownership in months gives you a fraction. Apply that to the gain (selling price minus buying price, less costs of buying and selling and any improvements). That will tell you how much is liable to CGT, you have a £3k allowance if not used elsewhere.