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Where Taxpayers and Advisers Meet

Time limit to reinvest in new home?

Stef Parker
Posts: 1
Joined: Tue May 15, 2018 10:43 am

Time limit to reinvest in new home?

Postby Stef Parker » Tue May 15, 2018 10:48 am

I am selling a house in mallorca and moving back to Uk to buy a new house. This has been our main residence in Mallorca and we intend on putting the money towards our new main residence in Uk so I believe we will not have to pay capital gains tax. But I heard you only have six months to put this money into a new home, is this correct? Also what if our buyers are paying a 10/20% deposit and the sale may not be completed for 5 or 6 months. The likelihood is we will have had that deposit for longer than six months before reinvesting in the new house. So is it six months from when the sale completes and we have the full funds or will we potentially have to pay tax on that deposit we receive?
Stef Parker

Posts: 332
Joined: Mon Feb 13, 2017 10:09 am

Re: Time limit to reinvest in new home?

Postby someone » Wed May 16, 2018 9:29 am

If CGT is due then buying a new home straight away or after 10 years makes no difference.

I wonder whether you're thinking of the higher rates of SDLT and the replacing a main residence exemption.

I think the limit is three years.

But it only applies if you own other residential property.

If you own property in the UK and Malta then you'll have to look into how 'main residence' is decided.

Posts: 7450
Joined: Wed Aug 06, 2008 3:25 pm

Re: Time limit to reinvest in new home?

Postby maths » Wed May 16, 2018 3:02 pm

There is no 6 month limit.

I suspect you may be referring to the 18 month limit; once you move out of your Mallorca residence and it is therefore no longer you sole/main residence you have up to 18 months to sell it without giving rise to a UK capital gains tax charge.

For UK capital gains tax the date of sale is date of "exchange" not date of "completion".

However, in some European countries the sale of a residence is free of local capital gains/income tax but only if the sale proceeds are reinvested within a time limit (possibly 6 months).

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