Capital Gains Tax question?

  • Filter
  • Time
  • Show
Clear All
new posts

    Capital Gains Tax question?

    Dear Forum,

    I currently live in a rental house but looking at purchasing below market value a property owned by family member.

    If this is my main home, would there be any length of time I would need to live in it, as to not pay CGT.

    Tried searching HMRC and asking Citizenz Advice but get conflicting answers so thought I would ask on here.

    Many thanks.

    The below market value part affects the tax on your family member, not on you.


      I'm reading this slightly differently. Are you asking whether, once you have bought it at less than market value, there is a minimum period that you have to live there before you yourself can sell it on at a profit and not pay CGT ?

      If so, the answer is no.
      I've copied & pasted the following from the relevant part of HMRC website for you. The bit you need to search for, by the way, is Private Residence Relief.

      If you dispose of:
      • a dwelling house (which can include a house, flat, houseboat or fixed caravan) which is your home
      you will be entitled to full relief 1 where all the following conditions are met:
      • the ‘dwelling house’ has been your ‘only’ or ‘main residence’ throughout your ‘period of ownership’
      If you live in, as your home, 2 or more houses, you can only have 1 main residence at a time for Private Residence Relief. You can nominate which residence is to be treated as your main residence for any period. Your nomination must be made within 2 years of the date you first have a particular combination of residences. If there is a change in your combination of residences, a new 2-year period begins. If you do not make a nomination, the question of which is your main residence will be determined on the facts.

      Your period of ownership begins on the date you first acquired the dwelling house, or on 31 March 1982 if that is later. It ends when you dispose of it. The final 18 months of your period of ownership always qualify for relief, regardless of how you use the property in that time, as long as the dwelling house has been your only or main residence at some point.

      Hope this helps.
      Last edited by __chris__; 16-11-2017, 15:24 PM. Reason: typo.


        Sorry still confused.

        Would I be right in thinking that family member wont have to pay any CGT as the property sold for less than they purchased it.

        But if this becomes my only home and I spend time and money doing repairs to property and have no other interest in any other properties would I be able to sell above what I paid for, without CGT, even if I only own for 6 months.

        Sorry to sound thick but been told must stay in house for 2 years, or so many other variables.



          My understanding is that the family member has to pay CGT based on the open market valuation for the property. Your input cost is then the same figure. However, if you meet the conditions for primary residence, you don't actually pay for gain over the initial valuation. However, wait to see if anyone contradicts this.

          This assumes it was an investment property for the family member.


          Latest Activity


          • Reply to Let Property Campaign.
            by theartfullodger

            Well done HMRC..

            None of my business, and obviously not in anyway a criticism of anybody, but If I had had a friend who I found out had been fiddling tax for 16 years they'd no longer be my friend.
            18-09-2021, 11:46 AM
          • Let Property Campaign.
            by armour
            Hi all,

            A friend of mine has been renting out a flat since 2004 and has not declared any of the income to HMRC in all that time.

            She wants to come clean and pay the accumulated income tax she owes by making a non-prompted disclosure using the Let Property Campaign system....
            13-09-2021, 13:45 PM
          • Reply to Let Property Campaign.
            by armour
            Fair enough. Thanks for your advice. It is on cash basis.

            I guess it would only save her 50 odd quid anyway, maybe less than £80 once the fine and interest is added. I guess she'll have to swallow that.
            Once again, thanks JP and Gordon for your help.
            18-09-2021, 09:07 AM
          • Reply to Overseas Landlords
            by Santa Fe
            Boletus, thank you.
            17-09-2021, 18:37 PM
          • Overseas Landlords
            by Santa Fe
            I'm from UK but live overseas and recently discovered that I should be registered as an overseas landlord. I've done a bit of research on what it involves and it seems a bit of a headache - tenants have to fill out forms and pay tax from their rent direct to HMRC. If anyone here is registered as an...
            16-09-2021, 16:44 PM
          • Reply to Let Property Campaign.
            by jpkeates
            armour - Sorry, I don't know.
            It might depend on whether you're accounting on the cash basis (in which case I suspect not) or the accrual basis (when it's possible).

            But it's not something I ever got involved with when the W&T allowance existed, and all of the practical guidance...
            17-09-2021, 11:43 AM
          • Reply to Let Property Campaign.
            by armour
            Thanks JP, that's clear. I'll put the bathroom in with the income tax then. I guess it's much of a muchness anyway as the associated reduction in interest and fine will probably equal out.

            I have one last question, if you'd be so kind.

            During the year she had to make the eviction,...
            17-09-2021, 09:18 AM
          • Reply to Overseas Landlords
            by boletus
            You fill out this form requesting to have rental income without deduction of tax and pay it yourself;

            16-09-2021, 17:26 PM
          • Reply to Let Property Campaign.
            by jpkeates
            The 10% was for furnishings, so built in stuff should be ok to claim.
            The bathroom refurb depends on what was done if it was simply a replacement, it's maintenance, if it was a significant upgrade, it's likely to be part capital/part maintenance.
            If it's a new bathroom, it's probably ca...
            16-09-2021, 08:37 AM
          • Reply to Let Property Campaign.
            by armour
            Seems pretty clear there JP. I'll go ahead and alter my calculations

            One more thing, My friend had a bathroom refurb and a built in oven and hob replaced during the period when the flat was let furnished. I'm pretty sure that these costs can be detucted in addition to the 10% W&T, but...
            15-09-2021, 14:06 PM