Capital Gains Tax - A query

[shrewster]

I bought a property in 1996 lived in it for 14 months then moved away for work for 5 years (where I rented a place to live and also rented out my house).

I have since returned to my original location and sold my old house because it was too small to move back into and bought a bigger house to live in.

Will I have to pay CGT on the profit on my old house? I havent really benefited financially at all in real terms

[kags]

You are in a pretty good position as you did in fact live in the house at some point. After calculating the gain on the property, you are entitled to the following reliefs/deductions

1. costs of sale and purchase, including stamp duty
2. costs of any improvement work done to the property (not general maintenance)
3. inflation allowance for the period up to April 1998
4. a time apportionment of the gain for the period you actually lived there, the final 3 years of ownership, and perhaps for the remainder of the time if you were forced to move away because of your work
5. Lettings relief of up to �40,000 (although this calculation can get complicated!)
6. A taper relief relating to the period of ownership (this could be 30 or 35% in your case)
7. Your annual exemption from Capital Gains Tax of �8500.

I would contact your local Tax Office for assistance with the calculation of the gain.