Snooze alert - CGT on property

[simjb]

Hi all,

I'd really appreciate some advice on a scenario I feel I may have to seek professional advice on but if others know better then fantastic. Firstly, apologies in advance as this is perhaps drawn out and not scintillating reading.

I bought a property in 1998 which has gained considerably in price after ownership for 19 years. This was my principle residence up until I rented it last year in May 2016. My understanding is that there was a 36 month period after moving out which would still attract tax free status but this was reduced to 18 months approx 2 years ago. I understand also that there are stipulations which attract relief after renting the principle clause of this being a £40k rent relief.
My overall understanding on potential tax considerations are: owned for 26 years, rented for 7 therefore 7/26th of capital gain is considered to be offset against any costs to be deducted as part of maintaining property or improving it eg new kitchen's, bathroom, professional fees' etc. £40 letting relief, CGT allowance all to be deducted against the 7/26ths gain.
Having owned the property for now 19 years I'm extremely wary of how I manage this when selling to keep things CGTax free or to minimise tax paid.
I'm looking to acquire 1 possibly 2 additional properties, which whilst I understand attract the second home stamp duty charges, should be worthwhile to do if I can minimise tax.
I plan on keeping the original property, which is now rented, for likely an additional 6 years as this is the term I have calculated whereby I should attract zero to minimal tax.

My questions are :

1. Are there things that I need to be critically aware of before buying additional property ?
2. How do I ensure if buying other properties that the original is still appointed the principle primary residence to attract this relief ?
3. Is there an optimum way to legally structure these properties so that I get it as good as can be from the start and avoid having to potentially change things that could be avoided with foresight ?

I hope I have been clear, though please do let me know if further clarification was needed and thank you very much in advance.

Best regards

Simon

[SteLacca]

You've got it all wrong.

Gain (before reliefs) = SP-(SC+AC+IC) where SP = sale price, SC = costs of sale, AC = cost of acquisition (purchase price plus associated costs) and IC= improvement costs (i.e. capital expenditure not allowable against rental income incurred during the whole period of ownership.

Private residence relief = 18.5/19 x gain (17 years + 18 months)
Lettings relief = lower of £40,000, Private residence relief or the balance of the gain.

Chargeable gain-(private residence relief+lettings relief).

[Peter D]

Did you live in the house with your wife and was she an owner, joint or tenants in common and what share.
Please provide all the dates, at least mm/yyyy and values including SDLT, est selling agent and legal fees.
Your individual salary in the year of disposal and remember to include the rental profit. Regards Peter