Capital Gains on Sale of Rented Property

[chrisa]

I own a property jointly with my sister, which has been rented out since we bought it for £73,000 3 years ago. It is now worth around £100,000. We may wish to dispose of it in the near future but if we decided to occupy it for a period, how long would we have to live in it if we were to avoid Capital Gains?

[hashman]

Long enough to establish it as the PPR of you both. There is no time stipulated in the legislation but I would generally be comfortable with 12 months. Do not put it up for sale immediately after moving in and if you have another residence (which you presumably do at the moment) you need to consider nominating the jointly-owned property as your PPR. This can then be varied after a week in favour of your current PPR.

[Bob Jones]

This scenario has cropped up before - it is quality of occupation not length time.You have to show that it is your residence. If you can show that you have informed not so much HMRC of your change of address (as this would be an obvious thing to do)but the bank and similar parties eg Car Tax, car insurance etc. If you can produce items of correspondence eg from travel agents confirming holidays, junk mail, anything like this will indicate that it was your home - documentary evidence in this case is worth its weight in gold if the period of occupation is relatively short.

Bob Jones
Internet Taxation Ltd
bob@internet-taxation.co.uk