rent out main residence

[Mark333]

Hello

I am looking at renting out my main home. Figures are approx

Bought for 250k in 2004
Now worth 700k
Loft conversion cost 50k

So if I rent it out for 5 years and value at end is 750k then

Value increase = 500k
- 50k capital spends (ignoring buy and sell fees etc)

so 450 profit over 26 years = £17,300 pa

so CTG is on £17,300 x 5 = £86,500

OR

Value increase = 500k

so 500k profit over 26 years = £19,200 pa

so 19,200 x 5 = £96,000
minus loft 50k = £46000
so CTG is on £46,000

??

Thanks for any help on this

[AGoodman]

Your first example: work out the total gain first.

Gain is £450k

Relief is 21/26 = £363.5
Net gain is £86.5
Deduct £3k = £83.5k

Tax accordingly at marginal rates.