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Where Taxpayers and Advisers Meet

Returning to main property to sell

Oor Wullie
Posts: 2
Joined: Sun Jul 07, 2019 12:23 pm

Returning to main property to sell

Postby Oor Wullie » Sun Jul 07, 2019 1:02 pm

I bought my London flat back in 1984 and lived there until 1993 when moved out and have rented the flat out - and have done so ever since. I've aIways declared the rental income (in recent years via a letting agency). But - I plan to retire in 2022 - and sell the flat. I understand that it needs to be my main residence for 2 of the years preceding the sale. I currently live in Scotland. The current tenant moves out in a few weeks - the letting agent says I only need to nominate the london flat as my main residence and have a utility bill or council tax in my name for the final two years - and can still rent out the property through them, that I don't have to physically live in it to, avoid being liable to CGT on sale. Does this advice sound reasonable? What sort of checks does HMRC undertake on sale of a property. Do I need to officially tell HMRC at the point I elect the Lonond place as my main residence? Is the letting agent's advice unreliable? If necessary, I can just stop renting the place out and make it my main reside, foregoing the the rental income for two years (about 30K in total, gross) although I could only physically stay in the flat on the ocacssional night (my office is in London) or weekends. Will it matter that I will physically spend most of my time in Scotland, in what will then be my second home until after the London sale, at which point it will revert to being my man residence. I don't want to break any laws but at the same time I don't wanbt to hand over tons of money in CGT is itfcan be legally avoided.

Sorry, I know there's a lot in there-any advice?

Many thanks

Jholm
Posts: 59
Joined: Mon Mar 11, 2019 4:22 pm

Re: Returning to main property to sell

Postby Jholm » Mon Jul 08, 2019 1:07 pm

You have seemingly been misadvised and to be honest, a letting agent isn't best placed to give tax advice. It was your main residence from 1984 to 1993 and has not been since (certain reasonable assumptions made). You will get relief for the period it was your main residence. The relief is based on periods of actual and deemed occupation so it really depends on the history of that residence and other. Given the potential amount of tax at stake, it is probably worth appointing someone to deal with it on your behalf.

It is very unlikely that there will be no tax payable.

wamstax
Posts: 1864
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Returning to main property to sell

Postby wamstax » Mon Jul 08, 2019 1:16 pm

As JHolm says pay somebody reliable to get advice you rely on. Unlikely Main Residence election will be possible given your stated facts and letting agent is hardly proper place to get tax advice. Tell them to stick to letting as from what you say more likely to lead you into deliberate tax evasion.
Loads of possibilities for main residence relief ( deeming) and additionally Lettings Relief that would need to be explored thoroughly
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact can be obtained from website

Oor Wullie
Posts: 2
Joined: Sun Jul 07, 2019 12:23 pm

Re: Returning to main property to sell

Postby Oor Wullie » Mon Jul 08, 2019 7:39 pm

Many thanks to the two respondees. Very nuch appreciated. I'm going to have a look for a property tax/cgt adviser, here in Glasgow, who can offer me face to face tax reducing advice beyond the basic calculations I can access on the web? Can anyone recommend such an adviser in Glasgow - someone who really knows their stuff? Thanks all.

Jholm
Posts: 59
Joined: Mon Mar 11, 2019 4:22 pm

Re: Returning to main property to sell

Postby Jholm » Tue Jul 09, 2019 9:30 am

In all honesty it is fairly basic stuff for a tax adviser so I wouldn't get too caught up hunting around. You should be able to find someone quite easily.


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