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Where Taxpayers and Advisers Meet

CGT Relief for Rental Property that used to be Main Residence

Martintaxes
Posts: 15
Joined: Fri Apr 28, 2017 12:25 pm

CGT Relief for Rental Property that used to be Main Residence

Postby Martintaxes » Wed Nov 21, 2018 10:27 pm

Hi, if we were to rent out our main home for say 5 years that we have lived in for 16 years, how is the capital gains calculated, assuming we then sell? Is it just poportional? 5/(5+16) x CGT rate?
Thanks in advance!
Maryin.

maths
Posts: 7479
Joined: Wed Aug 06, 2008 3:25 pm

Re: CGT Relief for Rental Property that used to be Main Residence

Postby maths » Wed Nov 21, 2018 10:48 pm

16 + 5 = 21 years.

Private residence relief would be [[16 + 1.5] / 21] x capital gain
Lettings relief would be [3.5/21] x capital gain (or £40,000 if smaller)

In addition there would be an annual exempt amount of £11,700 (currently)


The reference to the 1.5 above is a reference to the last 18 months which is automatically deemed to qualify for private residence relief.

Martintaxes
Posts: 15
Joined: Fri Apr 28, 2017 12:25 pm

Re: CGT Relief for Rental Property that used to be Main Residence

Postby Martintaxes » Sun Nov 25, 2018 6:33 pm

Thanks very much for the detailed response.
Regards.
Martin..


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