2nd home becoming main residence

filbertfox

We have sold our main residence of 20 yrs.
We now intend to spend most of our time in our 2nd home of about 6 years. 
So does our 2nd homes now automatically become our main residence?
And how do we make the change?
As this will have a positive impact regarding Council tax.as a 2nd home in Wales we pay more than a main resident. 
Also if we should we sell would we still be liable for capital gains tax.?

lincroft1710

By "most of the time" I presume you mean "all the time, other than holidays or visiting friends/relatives".


As soon as the money changes hands (and providing you are moving or have moved out) you will cease to have 2 homes and should inform your Welsh council of the Welsh home being your only and full time home.


The Welsh home will be subject to CGT when you sell but the amount will be subject to whether you sell (e.g.) in 2 years or 20 years time. 

Grumpy_chap

filbertfox said:

We have sold our main residence of 20 yrs.
We now intend to spend most of our time in our 2nd home of about 6 years. 
So does our 2nd homes now automatically become our main residence?
And how do we make the change?
As this will have a positive impact regarding Council tax.as a 2nd home in Wales we pay more than a main resident. 
Also if we should we sell would we still be liable for capital gains tax.?

Once the 2nd home becomes your PPR, CT will be the standard rate.

CGT will be applied when you eventually sell the property, based on the proportion of time it was 2nd home versus PPR.  You have owned it for 6 years.  Assume you sell in another 4 years.  That would be 10 years total.  60% (6 out of 10) of the gain would be subject to CGT.

glennevis

Quote "So does our 2nd homes now automatically become our main residence?"

To make it absolutely clear, write to HMRC declaring the date your 2nd home became your principal residence. You can backdate the letter up to 2 years if you've already moved.

HMRC will write back and confirm the starting date. Keep the letter and use if you ever sell and need to calculate/declare the period of main residence for calculating CGT.

Bookworm105

for the sake of pedantry, when you come to calculate the CGT on your sale of the Welsh home you must use days or months, not years, when working out the % fraction of time 

p00hsticks

Grumpy_chap said:

filbertfox said:

We have sold our main residence of 20 yrs.
We now intend to spend most of our time in our 2nd home of about 6 years. 
So does our 2nd homes now automatically become our main residence?
And how do we make the change?
As this will have a positive impact regarding Council tax.as a 2nd home in Wales we pay more than a main resident. 
Also if we should we sell would we still be liable for capital gains tax.?

Once the 2nd home becomes your PPR, CT will be the standard rate.T.

But you will need to let the council know that 

Grumpy_chap

p00hsticks said:

Grumpy_chap said:

filbertfox said:

We have sold our main residence of 20 yrs.
We now intend to spend most of our time in our 2nd home of about 6 years. 
So does our 2nd homes now automatically become our main residence?
And how do we make the change?
As this will have a positive impact regarding Council tax.as a 2nd home in Wales we pay more than a main resident. 
Also if we should we sell would we still be liable for capital gains tax.?

Once the 2nd home becomes your PPR, CT will be the standard rate.T.

But you will need to let the council know that 

Yes, indeed, the Council are not mind readers.

filbertfox

lincroft1710 said:

By "most of the time" I presume you mean "all the time, other than holidays or visiting friends/relatives".


As soon as the money changes hands (and providing you are moving or have moved out) you will cease to have 2 homes and should inform your Welsh council of the Welsh home being your only and full time home.


The Welsh home will be subject to CGT when you sell but the amount will be subject to whether you sell (e.g.) in 2 years or 20 years time. 

By 'most of the time' we do intend to let out the property in the 2 month summer season when we are away on holiday.would that have any impact on Council tax or CG tax?

lincroft1710

filbertfox said:

lincroft1710 said:

By "most of the time" I presume you mean "all the time, other than holidays or visiting friends/relatives".


As soon as the money changes hands (and providing you are moving or have moved out) you will cease to have 2 homes and should inform your Welsh council of the Welsh home being your only and full time home.


The Welsh home will be subject to CGT when you sell but the amount will be subject to whether you sell (e.g.) in 2 years or 20 years time. 

By 'most of the time' we do intend to let out the property in the 2 month summer season when we are away on holiday.would that have any impact on Council tax or CG tax?

Shouldn't have any effect on CT, not sure about CGT

Grumpy_chap

filbertfox said:

By 'most of the time' we do intend to let out the property in the 2 month summer season when we are away on holiday.would that have any impact on Council tax or CG tax?

Have you considered the practicalities of letting out your home for a couple of months each year?
Presumably you will have private possessions that you need to put into storage?
How will you manage post in that period?
How will you feel if a holidaymaker spills red wine over your best sofa?  stains the mattress in your master bedroom?
Is this covered under normal house insurance?
Where will you be staying "away"?
How to maintain the property / garden?

sheramber

Will it be a holiday let, airb&b  etc?