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Where Taxpayers and Advisers Meet

Selling rented houses and CGT

Rauly
Posts: 2
Joined: Sat Jun 08, 2019 3:01 pm

Selling rented houses and CGT

Postby Rauly » Sat Jun 08, 2019 3:11 pm

Hi, can anyone help.
I used to live in a house that I bought from 1996 to 2001, and then moved a short distance away and rented it out until now. I paid the tax on this rental and a couple of other rentals and now looking to sell up.
What are the rules about having the tenant moving out and me moving back as my main residence to be able to sell after doing some necessary work on the house?
Is this still a legitimate way to sell without paying CGT?
I would probably rent my current house out so effectively swapping my home for the duration.
Is there any other criteria such as how long do I need to stay in the property before selling or putting it on the market?
And finally, I might sell another place in the same tax year and would expect to pay the required tax, but would this add to any concern the tax office might have by selling my possible current home in the same year?

Thanks in advance

AdamS93
Posts: 223
Joined: Tue Sep 26, 2017 6:28 pm

Re: Selling rented houses and CGT

Postby AdamS93 » Sat Jun 08, 2019 3:57 pm

'Is this still a legitimate way to sell without paying CGT?' It never has been and still isn't. You probably heard this from a mate down the pub, which are probably best ignored.

You look at the periods of owner occupation and apportion the gain between periods of owner occupation and periods you rented it and periods it was empty. The periods that you rented it out and periods it was empty are chargeable to CGT. There are other reliefs/periods of deemed occupation so best to get some professional advice on the matter.

Rauly
Posts: 2
Joined: Sat Jun 08, 2019 3:01 pm

Re: Selling rented houses and CGT

Postby Rauly » Mon Jun 10, 2019 8:07 am

Thanks AdamS93. I think I got the impression that this could be done from the MPs expenses a few years ago. As I remember it was called "flipping" I think.
I shall have a look for a CPT calculator that offers the occupation aspect as the ones I found don't have that facility.

someone
Posts: 372
Joined: Mon Feb 13, 2017 10:09 am

Re: Selling rented houses and CGT

Postby someone » Mon Jun 10, 2019 10:20 am

Thanks AdamS93. I think I got the impression that this could be done from the MPs expenses a few years ago. As I remember it was called "flipping" I think.
Flipping for MPs was, mostly, related to their expenses for second homes. They could claim sonething rediculous like 20k p.a. tax free for maintenance. So they'd 'flip' their homes so as to get both (or more) of them done up at the taxpayers expense (this has been stopped)

There's also the last 18 months exemption (was 36) which is a big chunk of a single parliament term. So MPs probably could avoid CGT during a single term of parliament.

Finally (and I might have misunderstood) there are some complicated rules related to spousal transfers around PPR. If the transfer occurs while it's a PPR then the spouse inherits the other's residence. But if it's not PPR at the time of transfer they dont. So - spouse A owns 100%. They transfer it to Spouse B while not PPR. They then make it PPR. When they sell, it has been spouse B's residence for 100% of their ownership so no CGT.

No idea if this is what MPs were doing - mostly I think it was flipping for expenses.


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