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Where Taxpayers and Advisers Meet

CGT on main residence that was rented out before

buff
Posts:4
Joined:Fri Mar 31, 2017 11:23 am
CGT on main residence that was rented out before

Postby buff » Fri Mar 31, 2017 11:28 am

Hi, wondered if someone could help.

We inherited our property in 1993 (was living there before as well) and then we rented it out from 1994 to 2007 whilst we lived abroad (did not own a property abroad, but the property in the UK would not be classed as our main residence I guess). We moved back in 2007 and have lived there ever since.

If sold, would we need to pay CGT? If so, presumably it would be the period it was rented? And is anyone able to provide me with the formula for working this out?

Many thanks

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: CGT on main residence that was rented out before

Postby pawncob » Fri Mar 31, 2017 4:35 pm

Read this:https://www.gov.uk/tax-sell-home

or do a search on here.
With a pinch of salt take what I say, but don't exceed your RDA

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT on main residence that was rented out before

Postby maths » Sat Apr 01, 2017 7:03 pm

We inherited our property in 1993 (was living there before as well) and then we rented it out from 1994 to 2007 whilst we lived abroad (did not own a property abroad, but the property in the UK would not be classed as our main residence I guess). We moved back in 2007 and have lived there ever since.

If sold, would we need to pay CGT? If so, presumably it would be the period it was rented? And is anyone able to provide me with the formula for working this out?

Crudely, property owned for 24 years.

Lived in for 11 years [becomes 12.5 years due to last 18 month rule}.

Rented out for 13 years.

So, roughly, 50% of any gain is exempt from CGT with the other 50% of the gain subject to "lettings relief" of a maximum of 40,000.

Gain equals sale proceeds less cost.

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT on main residence that was rented out before

Postby Peter D » Sun Apr 02, 2017 10:23 am

Read this
https://www.gov.uk/hmrc-internal-manual ... al/cg65030

Does this apply to you.

Regards Peter

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT on main residence that was rented out before

Postby Peter D » Sun Apr 02, 2017 10:26 am

Read this
https://www.gov.uk/hmrc-internal-manual ... al/cg65030

Does this apply to you, particularly Exemption 2.

Regards Peter

buff
Posts:4
Joined:Fri Mar 31, 2017 11:23 am

Re: CGT on main residence that was rented out before

Postby buff » Mon Apr 03, 2017 9:34 am

Many thanks for the replies and especially Peter D for the link - it would seem that exemption 2 would apply to us, as we did move out of the UK and worked in employment for the whole period that the property was rented out.

Am I right in interpreting that this whole period is exempt and therefore the CGT liability would be zero?

Many thanks


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