Will I pay CGT on selling my flat?

[mazzaj]

Hi -- we live in New Zealand (been there for 27months). We intend to stay there for another 2 years. On our return, we wish to sell our flat - will we be liable to capital gains tax? We have been renting the house out during our absence, paying tax on the rental income.

I have heard about the 36month rule -- so would it be better to try and sell the house within this period or wait until we get back in 2005?

Thanks
Matt

[Ian McTernan CTA]

Depends when you actually bought the property- if prior to 1998 and sold in the tax year before you return, then no CGT to pay, otherwise as you originally lived in it PPR relief is due on the time you actually lived there and you will also have the benefit of the 36 month rule and also the letting exemption.

If bought before 1998 then would suggest you sell in tax year prior to return to avoid having to report the gain at all.

Regards.

Ian McTernan CTA
McTernan Associates Ltd
ian@imcternan.com