Sale of Second Property - Help Please.

[steve 23]

I bought a small one bedroomed flat after a divorce (five years ago) for approx £50k, recently (Oct 03) I have bought a House with my Girlfriend and have lived there ever since.

We had decided to keep the flat as an investment so let it out in December 03, the tennant has recently moved out (May 05) leaving the property empty.

The rental income was reported to the Inland Revenue on a tax return.

Therefore we are now looking to sell, the property has been valued at £85k, I have some Questions:

1) Am I liable to Capital gains tax.
2) What sort of figure would I be looking at.
3) Would it matter if I put the property into joint names.
4) Are there any discounts /reductions available as the property has stood empty for a couple of months.

Any help would be appreciated!

[CDavey9501@aol.com]

No CGT liability if the property was your main residence during period from purchase to Oct'03. Maybe a gain if sold after Oct'06, although unlikely as you will also qualify for letting relief.

[Instinctive]

Exempt from CGT as PPR from date of purchase to Oct 2003 plus final 3 years.

Therefore, chargeable gain will accrue only in respect of any period of ownership, if still unsold, after October 2006. Even then, you will have lettings relief, taper relief and annual exemption to cover any chargeable gains. Therefore, you could afford to sell long after October 2006 and still not pay any CGT.

Ramnik