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Where Taxpayers and Advisers Meet

CGT sell or not to sell property

kanrent
Posts:68
Joined:Tue Dec 16, 2014 8:20 am
CGT sell or not to sell property

Postby kanrent » Wed Jan 20, 2016 6:18 am

Hi can anyone advise me
I an a non resident landlord (British citizen) i rented out my house which was my only home for the last 15 years after living in it for 17 years, i now have to pay CGT if i sell
I would still like to have a rental property in the uk, but havent a clue how CGT works
I was wondering if i should sell my existing property to reduce the CGT on that one and buy another buy to let later.
In short is there anything to be gained in selling the property i have now and buying another later or just keeping my existing property and continuing renting it out.
Thanks for any help

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT sell or not to sell property

Postby Peter D » Wed Jan 20, 2016 11:48 am

You would only have a CGT liability from April 2016. You will need a formal valuation. However Selling it buying another BTL does not really to you and favours. Your present property attacks PPR exemption for the period you lived there plus 18 months and up to £40,000 of letting relief. If it has been a good renter I would keep it.
Also be aware that if you sell it you may well have a CGT or IT liability in the country you presently live in.
Regards Peter

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT sell or not to sell property

Postby Peter D » Wed Jan 20, 2016 1:04 pm

Typo. From the 5th April 2015. Regards Peter

kanrent
Posts:68
Joined:Tue Dec 16, 2014 8:20 am

Re: CGT sell or not to sell property

Postby kanrent » Thu Jan 21, 2016 11:47 am

hi peter i have just had the property valued by an estate agent does this qualify as an formal valuation

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT sell or not to sell property

Postby Peter D » Thu Jan 21, 2016 12:17 pm

It really needs to be a member of RICS for it to stand up against an HMRC enquiry. Regards Peter

maths
Posts:8037
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT sell or not to sell property

Postby maths » Thu Jan 21, 2016 1:20 pm

As a non-resident you are liable to CGT on a sale of your property. There are three methods of calculating any capital gain on a sale and in your case the so-called "default" method is most likely to mitigate any CGT charge ie property revalued as at April 2015 and only any gain arising thereafter is taxable.

If you became non-resident pre April 6, 2015 and thereafter have not spent at least 90 days in the property in each subsequent tax year then no private residence relief is available other than that attributable to the last 18 months of ownership. In view of this last 18 months relief a sale pre October 6, 2016 will mean no CGT is payable. The period pre April 6, 2015 being irrelevant re any CGT charge.

Other things being equal it may make sense to sell pre October 6, 2016.

kanrent
Posts:68
Joined:Tue Dec 16, 2014 8:20 am

Re: CGT sell or not to sell property

Postby kanrent » Thu Jan 21, 2016 4:45 pm

[quote="Peter D"]It really needs to be a member of RICS for it to stand up against an HMRC enquiry. Regards Peter[/quote
can HMRC calculate the value accurately

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT sell or not to sell property

Postby Peter D » Thu Jan 21, 2016 4:59 pm

Yes, they have a district valuer who does this all the time. Regards Peter

kanrent
Posts:68
Joined:Tue Dec 16, 2014 8:20 am

Re: CGT sell or not to sell property

Postby kanrent » Thu Jan 21, 2016 5:15 pm

Yes, they have a district valuer who does this all the time. Regards Peter
hi peter would HMRC district valuer be able to make an accurate valuation of a property 5 years in the past

Peter D
Posts:10668
Joined:Wed Aug 06, 2008 3:37 pm

Re: CGT sell or not to sell property

Postby Peter D » Thu Jan 21, 2016 5:52 pm

Yes, and much better than an estate agent. Regards Peter


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