Second home just whilst renovating

[JonS]

Hi All - I hope you can help me with this.

We currently live in property A and have just bought Property B

The plan is to renovate B and move into it (selling A in the process ) in 12 months time

I know I have to pay 2nd home stamp duty on B but will get the difference back from HRMC if we move in before 3 years but I'm unclear on the CGT position. Will A be subject to CGT when we sell it ? (I presume not as it remains as main residence), but if we move into B and then sell at some time in the future would it then become liable for CGT as it was once our second home?

Sorry this might all be crystal clear for the experienced people on the forum but I'm struggling with this a little so I do appreciate the help - many thanks indeed

[bd6759]

If a property has been your main residence, the period in which you live in it, plus the final 18 months of ownership, will be exempt from CGT. If you hold on to it for longer that 18 months after you move out, you may be liable to some CGT on a time apportioned basis.

For exampe, if you live in a house for 100 months and sell it 19 months after you move out, the exempt gain is 118/119. of the actual gain.

[bd6759]

A short delay in moving in iis ignored for a period of up to 12 months,

https://www.gov.uk/hmrc-internal-manual ... al/cg65003

[JonS]

Thanks for the replies - I appreciate you taking the time -

So, I'm pretty comfortable with the position on Property A - we won't be leaving that vacant for any period. Between now and say 12-18 months time, we'll be living in it full time and when we sell it, we'll be moving in to Property B which will become our main residence.

The bit I'm still not clear on (sorry about this) is property B. For 18 months it'll be a second home (although not lived in) - if after we've moved into it and lived in it for (hopefully) many many years - if we then come to sell for some reason - would it still be considered a 'second home' and the difference the value between now and then become subject to CGT?

thanks again -

[bd6759]

A second home? How many homes will you have after you sell propery A? If the answer is one, then arithmetically it cannot be a second home.

If you do not move in to a property right away, a period of 12 months ignored for CGT purposes. This can be extended up two years in eceptional circumstances. It does not matter that you have another home somewhere else. It allows overlap between buying one and selling the other.

CGT is not payable when you sell your home if, throughout the period of ownership, disregarding ignored absences, it has been your home.