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Where Taxpayers and Advisers Meet

CGT payable if i move back in to BTL property

Posts: 1
Joined: Tue Oct 13, 2020 9:39 pm

CGT payable if i move back in to BTL property

Postby rubyflowers » Tue Oct 13, 2020 9:51 pm

Hi I bought a house in my sole name in 1995 and lived in it as main residence until 2007 when I bought a second property jointly with my husband. So I am sole owner of previous property and jointly named on mortgage of second. Since 2007 the property has been rented out and is on a Buy to let mortgage. My husband and I are splitting up and I will be moving back to my previous property. I am hoping to sell the property and move away from the area. I mentioned I wanted to sell it but someone said I would need to pay CGT on it. My question is how long would I need to live there before I could sell it and avoid paying CGT. I need that money to buy another property elsewhere. The house has a 78k morgate on it and is valued at 160k.

Thank you in advance.

Posts: 36
Joined: Mon Aug 17, 2020 10:54 am

Re: CGT payable if i move back in to BTL property

Postby Samson22 » Wed Oct 14, 2020 8:56 am

I might be wrong but I think because you have let it out there is no way to avoid the cgt (practicably speaking). But the gain from 1995-2007 +last 9 months would be exempt

Posts: 3303
Joined: Sat Feb 01, 2014 3:26 pm

Re: CGT payable if i move back in to BTL property

Postby bd6759 » Wed Oct 14, 2020 10:32 am

The gain is only exempt during the period that you lived in it as a residence. A "residence" is a home where you intend to live for the foreseeable future, so moving in short term, with the intention of moving out again, would not normally count as a residence.

The gain is the difference between what you paid for it and what you sell it for (the mortgage is irrelevant)

The exempt gain, at the moment is the number of months you lived in it (roughly 144, plus the last 9 months = 153), divided by the number of months you have owned it (roughly 300).

That's 144/300, therefore just under half of the gain will be exempt.

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