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Capital Gains Tax Exemption
2 Answers
Hi all
Can anyone direct me to the right place for this. I own my family home which is currently tenanted as Employer require us to live where husband is working. We know that on sale we are exempt from CGT as it's our main residence. However now divorcing so I have to move out of home that comes with job. Have to move into rented temporarily until I can buy somewhere. ( was hoping to leave this house straight into new home but couldn't sell in time). As this is temporary until I can buy a home will the tax office still grant the exemption as the rented property or will they consider it my new main residence. Gain since we bought the house is considerable so CGT is likely to be about 20k. Has anyone experience of this or can give advice. Huge thanks in advance.
Can anyone direct me to the right place for this. I own my family home which is currently tenanted as Employer require us to live where husband is working. We know that on sale we are exempt from CGT as it's our main residence. However now divorcing so I have to move out of home that comes with job. Have to move into rented temporarily until I can buy somewhere. ( was hoping to leave this house straight into new home but couldn't sell in time). As this is temporary until I can buy a home will the tax office still grant the exemption as the rented property or will they consider it my new main residence. Gain since we bought the house is considerable so CGT is likely to be about 20k. Has anyone experience of this or can give advice. Huge thanks in advance.
Answers
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As I see it, you're wrong to assume that there's automaticall
13:07 Wed 30th May 2018
As I see it, you're wrong to assume that there's automatically no CGT to pay upon the sale of your property because you've classed it as your main residence. The fact that you've let it out removes your right to a full exemption from CGT.
However letting relief will apply instead. That's likely to be £80,000 (if you and your husband co-owned the property or £40,000 if only you owned it) which can be knocked off the capital gain before tax is calculated. Further, there might be an element of private residence relief to be taken into account (to allow for the gain in the value of the property while you were actually living there).
My answer is based upon reading these links:
https:/
http://
(See 'Let property')
https:/
However letting relief will apply instead. That's likely to be £80,000 (if you and your husband co-owned the property or £40,000 if only you owned it) which can be knocked off the capital gain before tax is calculated. Further, there might be an element of private residence relief to be taken into account (to allow for the gain in the value of the property while you were actually living there).
My answer is based upon reading these links:
https:/
http://
(See 'Let property')
https:/
Thank you that's enormously helpful re lettings relief. However I haven't assumed. The house is nominated on my tax return as main residence as we are required to live in tied accommodation tm for the job. Same as all the Armed forces. We always understood this meant we were exempt and tax office fully aware It Is tenanted.
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