Tradefair & Financials
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If I own two houses, living in one and having the other as a holiday home and sell the one I'm living in then move into rented accommodation and sell the second house (so at this stage the only one I own), will I still have to pay capital gains?
Any ideas?
Any ideas?
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As you will be living in rented accommodation your other home will not be your principal place of residence, so you will be liable for CGT.
You might consider selling your existing home and moving into your other property for around two years. That home would then be recognised by HMRC as your PPR and you could dispose of it and the gain would be exempt. If however you have done this 'trick' in the past you will be assessed as being a developer and may be subject to CGT on any gain, or even income tax. If you have previously lived in your second home for a period of time you may be able to claim Private Letting Relief, google it up to see if you might qualify. |
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Thanks for the reply. Have never actually lived there though it has always been rented out. Would I have to live there for 2 years then?
Is that the only way around it? |
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If you are married you can put the property in joint names and then dispose of it. Thus utilising two lots of CGT allowances, currently 10,100 each. You can also offset the exclusive buying, selling and stamp duty costs you have incurred, off any gains you might have made. Depending on your tax position gains will either be at 18% or 28%, or a combination of those rates.
To completely and legitimately circumnavigate all CGT, then yes, you will have to live in the property exclusively as your PPR for at least two years. However, be aware, this 'loophole' could be closed at some point in the future, or the 'qualification' period extended. |