Reducing CGT on Property

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stamboy
stamboy Posts: 131 Forumite
in Cutting tax
I have been renting out my own house for a number of years now (prior to which I lived there for a few years).

At the same time I have been renting a house in another town. Now I wish to purchase the house I am renting but in order to do this I need to sell mine. The problem is a significant CGT will arise even though the properties are valued at the same.

Is there any way I can reduce this as I will be out of pocket in terms of purchasing power?

I understand a swap would also not reduce my CGT liability (my landlord would be open to such a swap proposition).

Apart from a small part-time job the rental income is my only income.

I have read quite a bit on this matter although my knowledge is very limited and it seems I can't reduce it with an outright sale and purchase.

Another thought is what happens if I sell part of the house in a particular year say 25% this tax year and 25% next tax year? Would that help in any way as I understand the CGT allowance is yearly? Not sure if this has other implications though such as stamp duty.

Thanks in advance.
Titch :)

Comments

  • laticsforlife
    laticsforlife Posts: 1,313 Forumite
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    Unfortunately the 2 are not connected for tax purposes.

    The gain you have made is real as is the gain made by the seller of the house you might buy.

    And yes a swap is an event giving rise to the same CGT, so no benefit there.

    Yes I suppose you can part sell, and do a part gain, but you'd need an accountant to work out the sums, and that might negate the savings of 2x Annual Exempt Amounts.

    Also you'd still have issues over insurances, mortgages, repairs etc

    Not sure on SDLT though, different question altogether.
    I didn't do it, nobody saw me do it, you can't prove a thing! ;)
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  • stamboy
    stamboy Posts: 131 Forumite
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    SDLT, stamp duty presumably....?
    Titch :)
  • yorkiechick
    yorkiechick Posts: 115 Forumite
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    I don't know what sort of gain you would be looking at, but as the property was your main residence at one point, you would be able to claim Principal Private Residence Relief. If the property is sold before April 2020, you may also be able to claim Lettings Relief.
  • stamboy
    stamboy Posts: 131 Forumite
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    yorkiechick wrote: »
    I don't know what sort of gain you would be looking at, but as the property was your main residence at one point, you would be able to claim Principal Private Residence Relief. If the property is sold before April 2020, you may also be able to claim Lettings Relief.

    Interesting I will have to research these items as I don't know anything about them. Thanks
    Titch :)
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 14 November 2019 at 9:35AM
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    stamboy wrote: »
    Interesting I will have to research these items as I don't know anything about them. Thanks
    good grief, I thought you understood the basics?

    start here :
    https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

    more importantly your previous posts suggest you have been living in Thailand for several years?
    in which case you may now be treated as non resident and subject to different CGT rules
    please confirm status
  • stamboy
    stamboy Posts: 131 Forumite
    edited 18 November 2019 at 7:02AM
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    00ec25 wrote: »
    good grief, I thought you understood the basics?

    start here :
    https://forums.moneysavingexpert.com/showpost.php?p=73621764&postcount=2

    more importantly your previous posts suggest you have been living in Thailand for several years?
    in which case you may now be treated as non resident and subject to different CGT rules
    please confirm status

    Thanks for sharing. I was posting on behalf of someone else apologies I should have said that though I didn't think it mattered. I'm not in TH nor have I been in terms of residency but I will be as of next year. Your research skills are top notch ;-) keep it up.

    Thanks all very useful contributions as always.
    Titch :)
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