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    • markf1983
    • By markf1983 8th Feb 18, 3:31 PM
    • 2Posts
    • 0Thanks
    markf1983
    capital gains tax, what will i need to know?
    • #1
    • 8th Feb 18, 3:31 PM
    capital gains tax, what will i need to know? 8th Feb 18 at 3:31 PM
    We bought a house in June 2010 with a buy to live mortgage for 90,000, we lived in it until Feb 2013 when we moved into a rented house due to moving away with work to the other end of the country. We still live in rented accomodation.

    We rented it out until last month (Jan 2018) when we decided to sell, we have sold it for 150,000 and stand to make 80,000 after all fees (awaiting sale to go through).

    Do we need to pay capital gains tax or is it classed as our first home which we are led to believe we dont need to pay CGT on?

    We are not financially savy so dont understand any of the jargon on the HMRC website so if anyone replys please use laymans terms.

    Thanks in advance.
Page 1
    • AdrianC
    • By AdrianC 8th Feb 18, 4:03 PM
    • 17,602 Posts
    • 15,968 Thanks
    AdrianC
    • #2
    • 8th Feb 18, 4:03 PM
    • #2
    • 8th Feb 18, 4:03 PM
    It hasn't been your primary personal residence since 2013, so you need to pay CGT on the portion of time since then.

    June 2010 to Feb 2018 is 93 months. You lived in it for 33 months, and lived elsewhere for 60 months. So you pay CGT on 60/93 of the 80k increase - 51,600.

    Examples 4 and 5:
    https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief

    Your solicitor should be able to help you.
    • markf1983
    • By markf1983 8th Feb 18, 4:20 PM
    • 2 Posts
    • 0 Thanks
    markf1983
    • #3
    • 8th Feb 18, 4:20 PM
    • #3
    • 8th Feb 18, 4:20 PM
    Thank you for the quick reply, I am currently serving in the military and moved into the rented accomodation. does the HMRC take this into account?
    • AdrianC
    • By AdrianC 8th Feb 18, 4:24 PM
    • 17,602 Posts
    • 15,968 Thanks
    AdrianC
    • #4
    • 8th Feb 18, 4:24 PM
    • #4
    • 8th Feb 18, 4:24 PM
    Thank you for the quick reply, I am currently serving in the military and moved into the rented accomodation. does the HMRC take this into account?
    Originally posted by markf1983
    No. It doesn't matter why you're not living there. You could have sold it instead of renting it out...
    • Keep pedalling
    • By Keep pedalling 8th Feb 18, 5:01 PM
    • 5,095 Posts
    • 5,681 Thanks
    Keep pedalling
    • #5
    • 8th Feb 18, 5:01 PM
    • #5
    • 8th Feb 18, 5:01 PM
    It hasn't been your primary personal residence since 2013, so you need to pay CGT on the portion of time since then.

    June 2010 to Feb 2018 is 93 months. You lived in it for 33 months, and lived elsewhere for 60 months. So you pay CGT on 60/93 of the 80k increase - 51,600.

    Examples 4 and 5:
    https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief

    Your solicitor should be able to help you.
    Originally posted by AdrianC
    The OP will also get relief on the last 18 months of ownership as well, and they will also be able to claim letting relief

    https://www.gov.uk/tax-sell-home/let-out-part-of-home

    That together with 2 lots of annual allowance to take into account probably means that there would be little if any tax to pay.
    • 00ec25
    • By 00ec25 8th Feb 18, 8:05 PM
    • 6,514 Posts
    • 6,074 Thanks
    00ec25
    • #6
    • 8th Feb 18, 8:05 PM
    • #6
    • 8th Feb 18, 8:05 PM
    No. It doesn't matter why you're not living there. You could have sold it instead of renting it out...
    Originally posted by AdrianC
    not so

    OP states he is in the military and he says
    due to moving away with work to the other end of the country
    therefore he could fall within the job related accommodation rules if the move was because of a posting

    there is also then the question of whether there was an intention to return to the property after the posting. if that was the case, it does not matter that in reality you do not return, you would still retain a claim to PRR even though the property was let and you were living elsewhere because the elsewhere was rented, not owned.

    OP, for the sums of money involved go see a tax accountant (not just any old accountant) who is :
    a) familiar with CGT
    and
    b) up to speed on the absence rules especially as they apply to military postings

    https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64555

    https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65030

    you could easily owe nothing at all in tax
    Last edited by 00ec25; 08-02-2018 at 8:16 PM.
    • Gabbs the Newt
    • By Gabbs the Newt 8th Feb 18, 8:12 PM
    • 141 Posts
    • 409 Thanks
    Gabbs the Newt
    • #7
    • 8th Feb 18, 8:12 PM
    • #7
    • 8th Feb 18, 8:12 PM
    No. It doesn't matter why you're not living there. You could have sold it instead of renting it out...
    Originally posted by AdrianC
    None of what you have posted is true. Your initial post "forgot" the terminal 18 months that is due to anyone that disposes of a former home, and your subsequent post "forgot" that renting because of job based accommodation can be exempted.


    As a qualified accountant, who is studying for CIOT, I still had to reach for my textbook, I don't really understand why you would comment if you literally have no idea. Your final comment about selling it just smacks of jealousy.


    Anyway. To the OP, you probably have no tax to pay, but we need more info.
    Last edited by Gabbs the Newt; 08-02-2018 at 8:24 PM.
    • Choccygirl123
    • By Choccygirl123 8th Feb 18, 8:23 PM
    • 115 Posts
    • 125 Thanks
    Choccygirl123
    • #8
    • 8th Feb 18, 8:23 PM
    • #8
    • 8th Feb 18, 8:23 PM
    I would call the tax office and explain your situation. You should have registered it as your primary residence because nature of work it was uncommutable abd housubg provided.

    You intended to live in the property, but your work meant it was not an option. I think you shouldn!!!8217;t have to pay a penny, but act quickly. Explain you didn!!!8217;t realise situation, but you would have applied for the primary residence if you!!!8217;d known.

    We were in same position and never lived in ours due to postings. I!!!8217;ll dig my letter out tomorrow and message you the outline letter if you!!!8217;d like?
    Good luck
    Always counting down to pay day, but making baby steps getting life on track! Looking forward to cracking the debt once and for all.
    • 00ec25
    • By 00ec25 8th Feb 18, 8:56 PM
    • 6,514 Posts
    • 6,074 Thanks
    00ec25
    • #9
    • 8th Feb 18, 8:56 PM
    • #9
    • 8th Feb 18, 8:56 PM
    You intended to live in the property, but your work meant it was not an option. I think you shouldn!!!8217;t have to pay a penny, but act quickly. Explain you didn!!!8217;t realise situation, but you would have applied for the primary residence if you!!!8217;d known.
    Originally posted by Choccygirl123
    there is no need to "apply" for primary residence since it was de facto just that

    you are perhaps confused over the "nomination" rules and the 2 year time limit for claiming main residence when you have 2 residences. But that is not relevant in this case anyway

    "Under a service occupancy the property is occupied under licence and as such it is not a residence within the meaning of section 222. Therefore if the individual has only one other residence, there is no need to make a nomination in favour of the property which is intended as the main residence in due course."
    Last edited by 00ec25; 08-02-2018 at 9:01 PM.
    • Choccygirl123
    • By Choccygirl123 9th Feb 18, 9:06 AM
    • 115 Posts
    • 125 Thanks
    Choccygirl123
    Thanks 00z Still looking to dig my letter out, but vaguely remember nominating it and advising we could not live in house due to hubby service. We owned the house for 10 years and applied retrospectively for it to be our main residence as we were not aware it had to be nominated. It was always our intention to live in the house, but location meant it was just not possible. We sold 2 years ago without issue.
    Always counting down to pay day, but making baby steps getting life on track! Looking forward to cracking the debt once and for all.
    • p00hsticks
    • By p00hsticks 9th Feb 18, 11:12 AM
    • 6,253 Posts
    • 6,710 Thanks
    p00hsticks
    We bought a house in June 2010 with a buy to live mortgage for 90,000, we lived in it until Feb 2013 when we moved into a rented house due to moving away with work to the other end of the country. We still live in rented accomodation.

    We rented it out until last month (Jan 2018) when we decided to sell, we have sold it for 150,000 and stand to make 80,000 after all fees (awaiting sale to go through).
    Originally posted by markf1983

    ???? If you bought it for 90,000 and sold it for 150,000 then your starting point for a potential capital gain is surely only 60,000, not 80,000 ????
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