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Where Taxpayers and Advisers Meet

CGT on rented property

oxforshire_cat
Posts:3
Joined:Thu Mar 02, 2017 11:46 am
CGT on rented property

Postby oxforshire_cat » Thu May 04, 2017 9:31 pm

Hello,
Myself and my husband purchased a house in London in 2012 and in 2014 we moved to Oxfordshire due to my husband's job. We ended up living in job related accommodation for a while and then renting out another property. We haven't bought another house yet. We lived in the London house for 2 years and rented for 3. We now would like to sell and buy where we live and have just found we will be liable for CGT!
I am trying to figure out if I can use the living in job related accommodation exemption or the 'period of absence relief C (C absences totalling not more than 4 years when, the distance from your place of work prevents you living at home, or your employer requires you to work away from home in order to do your job effectively).
I spoke to a general accountant who provided a calculation but seems not to consider exemptions. Do I need to talk to a tax specialist?
I would really appreciate any help here.
Thank you

simplyaccountant
Posts:8
Joined:Tue Apr 25, 2017 2:42 pm

Re: CGT on rented property

Postby simplyaccountant » Thu May 04, 2017 11:25 pm

Hi, my understanding is as below...

Having read your question, I am not sure that you can claim period of absence relief i.e. deemed occupation of your home while away from your home due to work / employment. While you do meet criteria for one of three specific events, under which you can claim the relief, however your fact missing your returning to your home after that period, which is one of the requirement HMRC expecting to see.

it is very important to note that a period of absence can only be treated as a period of deemed occupation, if it was both preceded and followed by a period of actual, physical occupation.

HMRC have not given any guidance about how long a taxpayer must live in a property for that to constitute actual occupation. Instead they will look at the individual facts and circumstances of each case. It may be possible for a taxpayer to return to his house for just a few weeks, but the important thing is that the taxpayer must satisfy HMRC that for that short period the property was his home. As far as HMRC are concerned, they will look at the quality of the occupation rather than the physical time period.

Having said that The last 18 months of ownership (3 years for disposals pre 6.4.2014) of ownership always count as deemed occupation i.e. available for relief as long as the house was occupied at some point by the taxpayer. I hope your accountant has taken that into account.

I am not sure forum allows for IM or not, but hope above helps.

Regards
Mr M Patel

greybags1
Posts:47
Joined:Tue Jan 31, 2017 10:41 am
Location:NE Scotland

Re: CGT on rented property

Postby greybags1 » Fri May 05, 2017 9:30 am

With the London property having been your main residence both you and your husband (assuming the property is in joint names) can also claim lettings relief since the property has been let.

oxforshire_cat
Posts:3
Joined:Thu Mar 02, 2017 11:46 am

Re: CGT on rented property

Postby oxforshire_cat » Sun May 07, 2017 9:38 pm

Thank you so much for your replies, it sounds like I need to have somebody who really understands CGT exemptions to take into account the last 18 months and the letting relief. Is that more of a tax consultant then? I am not under the impression that my accountant can handle this kind of query...
Thanks a lot


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