CGT on additional property and main home.

hatnezmaturestudent

Capital Gains Tax conundrum?

In 1986, I bought a house which was my main home. In 2010, I bought another house which subsequently became my main home. HMRC were notified of the switch. My children lived in the 1986 home. I am now considering selling both. My question is;

How would HMRC calculate GAIN on 1986 home? Would it be based on its value in 2010 or 1986? Or is it based on some other method?

Thank you.

NoMore

It will be based on the value you bought it at in 1986, but you will be entitled to some Private Residence Relief for the time you lived there as your main home.

silvercar

All linear calculations.

So you’ll be selling it after 40 years of ownership and be exempt from CGT for the time it was your main home.

So selling price less buying price less buying and selling costs less any major improvements (but not repair and maintenance) =gain. Exempt for 24 years out of 40 (though do the calculation in months) so you’ll be liable for CGT on 40% of the gain. Take off your CGT allowance of £3k if not used elsewhere.

If the property is jointly owned, then you each have half the gain.

Jeremy535897

You should read https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2026

LITRG

Hi OP. You may find this section of our website useful.

Selling your home | Low Incomes Tax Reform Group

Hope this helps.