CGT liability on jointly owned property

[bp]

I bought a house with my girlfriend in May last year with the intention to live in it. However, because of work we had to move away before we had a chance to move in. We have been letting the property since July and now wish to sell it. Neither of us have ever owned any other property. There is likely to be a capital gain of ~£35k before allowances.

Questions:

1) Is there any way we can avoid CGT without moving in for 3 months, which because of work is still not possible?

2) Given that we have to pay CGT, can we reduce the liability by declaring unequal shares in the property (even though we're not married) as only one of us is a higher rate taxpayer? We bought the house with a joint mortgage which has been financed by the rental income.

Any help gratefully received.

[accountant@uktaxshop]

The good news is that the first year of ownership will be treated as if you had occupied the property - even if you didnt actually do so.

It is also worth bearing in mind that the last 3 years will also be treated as if it was you own home, so long as the reason for not living inthe property is that you needed to live away for work.

So which ever way you look at it you shouldnt have much of a liability.

Dont forget that you can offset you mortgage interest against your rental income, along with some other expenses. If you need somone to fill in your tax returns for a modest fee, please let me know.

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436