tarmac terror

iTrader: (2)

If I decide to sell my home which is my only property, where my family and I currently live, and there is no mortgage interest in it from any lender. While I am waiting to find a buyer, I see my ideal home up for sale at an affordable price.

So I negotiate a good price on the new house, and to ensure I secure the property, I clear out my savings to buy it outright.

At the point where my house makes the asking price, I sell it and put the total amount I am paid for my old house into my savings.

Do I incur capital gains tax in this scenario, as I am effectively selling a property which is no longer my home???

madscoob

iTrader: (3)

gov website will tell you, but from memory you are allowed to capitally gain 9k a year on your main home without paying tax, i had to houses when mum passed sold the house after getting bungalow in probate, had house for 9 years made 50k never paid a penny so almost the same as you bungalow became new home but house was main home for the 9 years before mums passing

hodgy0_2

No, the sale of your principle primary residence is 100% free of CGT

Mortgage or no mortgage is irrelevant

And I don't think a simple time lapse like that would change the material facts

Obviously if you took 10 years to sell - when it would not be your PPR then that might change things

As you can only claim 100 CGT relief on one property (your main one) at any given time)

But best to get advice or simply ring HMRC

PaulC72

I'm no expert but remember reading something about if you have lived there for a certain duration then CGT isnt paid, they may have changed it as it was a few years ago.

hodgy0_2

the principle on your main "principle private residence" (PPR) and CGT is clear and unequivocal

100% CGT free - as long as it is your main residence

in your example - there may be a short period where you move into you new PPR - and begin to receive 100% tax relief on CGT and when you still own your old house - that is now, no longer your PPR

but I would think - all things being equal, and you sell within a reasonable period of time - at the market rate at which you vacated the property no CGT is due

if you leave it a year, and in that time the property doubles in price - then it may be a different story

as according to the "principle" of CGT you can only claim it on one property at a time

so any gain on you new your house (in the above scenario) would be subject to CGT

thats my understanding anyway

andy97

iTrader: (1)

No, the sale of your principle primary residence is 100% free of CGT

Thumbs up

Bluie

As your property was your main residence it will still have PPR applied for 18 months after you move out, it used to be 3 years.

hodgy0_2

That's interesting, does it also apply if you buy another house - that becomes your PPR


So in effect getting 100% CGT relief on both houses

Bluie

We lived in a house for 4 years, the opportunity came up to buy another house which we moved into thus becoming PPR, we sold the old house after 2 years renting as at the time it did not sell straight away, we did not have to pay CGT, this was when you had the 3 year carry over.

hodgy0_2

Ok, interesting

Thanks

ditchmyster

iTrader: (7)

I always thought it was as long as you had lived in it for 3yrs then there was no cgt, regardless of how many other houses you have.