CGT on previous home/Residential Lettings allowance

[linda48]

I have lived in my house for 4 1/2 years and intend to re-mortgage as a buy-to-let. Then I am buying a new house jointly with my partner. I paid £96500 for the house, added a conservatory, double glazing, patio and parking that cost £20K. It is now worth £220K.

My questions are;

1) Are all those improvements allowable against profit.

2) If I let it for 3 years is there any CGT to pay.

3) I have read on this site about a £40k Residential Lettings Allowance but cannot see any reference to it in the IR info I have read.

4) If I kept it for say 10 years and it was worth £300k then what would the tax be.

It seems that I will taxed on the large percentage increase the house has achieved while I was resident if in later years prices level out (hope that makes sense)

Thanks

Linda

[demetris]

Double glazing and certain other costs should qualify as allowable expenses while I wouldn't think so about the conservatory.

If you sell within 3 years of renting out, there shouldn't be any capital gain as long as it was your principal private residence prior to letting out.

Lettings exemption reduces the gain that is attributable to the period the property was let out by the lower of £40k or the exempt gain.

I hope this helps.
Demetris Savva BA FCCA
http://www.tax-accounting-london.info

[linda48]

So am I entitled to this lettings exemption of £40K even if I jointly own another house which is my main residence at the time I sell my original home?

[demetris]

The letting exemption applies as long as the the house was your main residence for some time and the period it was let does not exceed half of the period of ownership. In addition, there is no need for the property to be occupied as the residence after the period of letting.

Demetris Savva BA FCCA
http://www.tax-accounting-london.info
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