Selling my property after having rented it out

[nikksmithuk]

I lived in my property for just under 2 years and then rented it out whilst i rented a flat and then moved into my partners house.

After letting it out for 2years i sold it in January 2003 and am worried about capital gains tax, am i right in thinking that im exempt if it is less than 3 years that i rented it out for?

Unfortunately i never declared my rental incone to the IR as id never had a tax form to fill in before but have just received my first so i realise i will have income tax to pay aswell!

Thanks

[accountant@uktaxshop]

Nick,

You are correct on both counts, ie

1.There should be no CGT on this particular sale although you should show it on your tax return
2.You should have declared your rental income. You may of course be able to relieve some of the income against allowable expenses, such as mortgage interest on the flat etc.

If you donÂ’t fancy filling in the tax returns yourself, please let me know.

Regards

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

[Ian McTernan CTA]

You need to make a voluntary declaration of the income to the Revenue after discussions with an adviser and get it in before submitting your Tax Return for 2003. You may be liable to interest and penalties for non-declaration, and the Revenue may start an enquiry into your affairs. You should seek professional help in this matter to present the information to the Revenue in the best possible light and you may even find the profit was small or non-existent.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com