Confirmation of what my accountant said on CGT

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    Confirmation of what my accountant said on CGT

    Hi all,

    Hoping you can confirm something that is fairly critical for me right now.
    Situation is I am an "accidental landlord" having lived in a property for 4 years, then met my now wife, moved in with her for a few years - but kept the original property in case we moved back there

    The tenant of my property wants to buy it, but can't complete til circa October - because of a windfall she's due then.

    So my accountant said if we EXCHANGE prior to April 6th I'll still be able to claim the £40k residence reflef once the sale goes through in October. Is that correct ??

    He was confident, but it's such an important thing I'd like to double / triple check

    thanks - any help apprciated !

    Paul



    #2
    I believe he's correct, though goodness knows how you'd get your tenant to cooperate.

    Also, I wonder if he would become 'landlord' on exchange, so no more rent for you?

    Comment


      #3
      Your point about him becoming landlord surprises me !'d have thought that "exchange" is a committment to buy, but not the actual purchase, so completion would be the point I cease being the landlord and he becomes the owner ? Who could i check this with - i'm guessing only a solicitor - but if so are here specialist ones ? thanks for the help

      Comment


        #4
        I'm not a solicitor but when I bought a tenanted property I was credited with the rent paid from the date of completion. This makes sense as this is point at which ownership is changed.

        Comment


          #5
          On exchange of contracts the buyer acquires an interest in the property, but does not assume full owner's rights until completion. Whilst unnecessary, to avoid argument, when selling to a tenant it is customary to include a statement that the tenancy continues until actual completion (which is not necessarily the agreed completion date).

          Unless there has been a change I missed, if the contract is unconditional, the tax point on a sale of land is the date contracts are exchanged.

          Comment


            #6
            JK0, Royw and Lawcruncher, thanks ever so much for your input, I'll be on to a conveyancing solicitor early next week to triple check but in the meantime you've put my mind more at ease for the weekend :-)
            thanks

            Comment


              #7
              I was concerned on reading this about the reduction in the period for paying any Capital Gains Tax that is still due - but this article suggests you still have 30 days from completion, while confirming the tax point is exchange. https://www.armstrongwatson.co.uk/ne...within-30-days

              Comment


                #8
                Hi Buzzard, I’ve since spoken with a solicitor and HMRC and they’ve confirmed exchange is the “contract date” as long as there are no conditions for completion

                thanks
                Paul

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