If We Sell at a Loss, Will We Still Have to Pay CGT?

[TaxInsider]

We are looking to move and are considering a buy-to-let scheme on our house in order to rent this property out. We purchased the property at £250K and it is currently valued at £230K. If we rent the property out for a year or two and then sell at £230K, will we still have to pay CGT even though the sale was at loss to the original purchase price?

[ArthurWeller]

If you look on HMRC website Capital Gains Manual at page CG14200 (www.hmrc.gov.uk/manuals/cgmanual/cg14200.htm) you can see that the capital gains computation is simply the disposal proceeds less the original expenditure. In your case this results in a negative £20,000 figure so you will have no CGT to pay. You have a capital loss that you can offset against any capital gains made this year or in future years. Also see page CG15810
(www.hmrc.gov.uk/manuals/cgmanual/cg15810.htm)

[maths]

Arthur

It appears that the house was their only or main residence.

If they move out and let for 3 years or less thereafter how can an allowable capital loss arise even if sold for less than purchase price?

[King_Maker]

If always the PPR, it's exempt from CGT under the 36 month rule.

Any Loss is not allowable for CGT.