Capital Gains on own home after renting

Landlord Discussion
1

Hi all I wonder if anyone can advise.

Here is my situation:

Purchased my home in 2005.

Since 2016 I have been renting due to the need to work in another part of the country.

If I was to sell the house , given not been resident in it for 6 years would Capital Gains apply?

Would a solution be to go back and live in the house for a period (how long) before selling ?

Thanks

GJP

2

Yes it would apply. It would apply to the proportion of time you rented it, although last 9 months are counted as if you lived there, even if it was rented for this time, so there is no benefit in moving back for a short period.

1 Like
3
4

Thanks Richard

How is the CGT worked out on a home which has been rented for say 6 years in a scenarios such as:

House purchase price 180k

Selling price 280k

House owned on mortgage for 17 years and rented fir 6.

Thanks

5

Does it also depend on how long you lived in it compared to how long you rented it out?

6

Total Gain is 100k

Period of rent would be 5.25 years. 5.25 is approx 31% of total ownership period (i assumed 17 years is period you lived in and rented combined). Chargeable gain is circa £31k. You can use cgt allowance of £12,300 (2 lots if jointly owned) to reduce this and then you pay 18% or 28% on balance.

7

Thanks for the info much appreciated.

God that tax is outrageous. I only live away from home following redundancy and the need to secure employment meant moving to another part of the country !

8

that is nothing compared to inheritance tax

9

Thanks both for your responses.

I have another tax query but will post in separate thread.

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