buying and selling houses, renting them and paying tax

stphnstevey

Do you have to physically tell the tax office via a form or anything which house is your private residence?

I have rented a house I used to live in, but have stated my new address (or new private residence) on my Tax Return - do I need to do anything more?

MarkyMarkD

You don't need to make a PPR (Principal Private Residence) election at all - it just helps to have done so if the situation isn't clear.

If you've already notified the Inland Revenue that you are letting out your former property (which you are required to do, as soon as you commence your letting business) and you've notified them that you've bought a new property and moved their as your correspondence address, you've effectively told them that your PPR has changed.

shilling_rabbit

My daughter purchased a property for my husband and me to live in in March
2002 (she has her own home). The property was £87k and my daughter funded this with a £67k BTL mortgage. Since then she has remortgaged the house as we remodelled the property for my husband's disability.
The mortgage is now £123k - the property is worth (estate agent advice) £220k.
My husband and Iwant to retire abroad, with my daughter selling this property to buy a home for us abroad. We have looked at the CGT information on this forum and also the IR website and cannot fathom what the CGT liability will be.
If we 'swap' homes for 6 months could she escape CGT, or if we wanted to move nowand sell the property for £220k what would the CGT be? She has never lived in the property and we pay rent to cover the interest only mortgage.

MarkyMarkD

Shilling

I don't think you've done things very sensibly from a tax point of view, to be honest.

It would have made a lot more sense for your daughter to have lent you the £20k in the first place and for you to have bought the property, given that you've been paying the mortgage interest in any case.

If she sells the property now she's going to be liable for quite a lot of CGT.

You quite likely can't "swap" houses because her lender will probably not allow her to live in a BTL property and she'd also need permission to let her existing property to you.

Your daughter would get taxed on the capital gain of c.£97k (less buying and selling costs) less taper relief of around 30% (6 years @ 5% per annum) = around £68k less annual allowance c.£9k = £59k @ 40% = around £24k.