CGT - when value of house is taken from

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    CGT - when value of house is taken from

    Hi all,

    Hoping you can clarify for me. I bought a house about 8 years ago, and moved out 4 years ago to move in with my wife, and rented my old house out.

    My understanding is if i sell the old house, the CGT is paid on the difference between purchase price, and sale price - without taking any account of a "theoretical" price when I moved out.
    Also from all the reading if I've got that right, then that approach isn't going to change with any upcoming tax changes?


    I'm aware of letting relief, primary residence relief, and the loss of letting relief next March.

    thanks

    Phil

    #2
    The gain (presuming the value has increased) is based on purchase and sale.
    The taxable gain is the period when you weren't living there, but the property isn't revalued at any intervening point.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      Thanks for responding JP, that confirms what I was thinking :-)

      Phil

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        #4
        The theoretical price when you moved out is irelevant.

        If you owned it for 8 years and lived there for 4, then 50pct of the gain is eligible for ppr relief. I.e no CGT.

        If you own it 10 years and lived there 4,then 40 pct is eligible for ppr.

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          #5
          Originally posted by Big_T View Post
          If you owned it for 8 years and lived there for 4, then 50pct of the gain is eligible for ppr relief. I.e no CGT.

          If you own it 10 years and lived there 4,then 40 pct is eligible for ppr.
          Indeed. For these purposes the gain eventually made on sale is effectively deemed to have accrued evenly across your period of ownership.

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            #6
            You’ll also get £40,000 worth of letting relief if sold before April 2020. See your accountant

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              #7
              Thanks all, yes I'm aware of the tax changes due next april, so have put the house up for sale already Unfortuntely the market seems to be dead as a doornail !

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