CGT after selling my main residence

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    CGT after selling my main residence

    Hi there
    First of all thanks in advance for your reply. I would really appreciate if you can calify some of my confusion.

    I have few queries regarding selling my main residence which would impact on how much CGT I would pay...

    1. I am buying a new house to live so how much time do I have to sell my current house before CGT trigger? (buffer between selling current and buying a new to avoid CGT as I heard the new rule of 9 months)
    2. If I buy my new house first, can I put on rent my current house during the period of selling process? (bcoz it may take long to sell and house might be empty)
    3. Will this renting idea would impact on CGT?
    4. I have a residential mortgage on my current house, so if I put it on rent, do I need to transfer to BTL mortgage during that period? My worry is it would be too much hassle for BTL and may not be worth it.

    Any advice on my questions would be much appreciated. Thank you very much.

    #2
    If you have lived in your main residence since you bought it, there's no CGT on the sale.

    If you let it out, CGT would be applicable on the period it was let less 9 months (so if you let it for less than 9 months before selling it, there would be no CGT to pay.

    You will need a BTL mortgage or consent to let from your residential mortgage lender.

    As you can't guarantee that the tenant will move out at a convenient time for your sale and the property will be more difficult to sell with a tenant in it, it's not the best idea.
    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).

    Comment


      #3
      Originally posted by jpkeates View Post
      If you have lived in your main residence since you bought it, there's no CGT on the sale.

      If you let it out, CGT would be applicable on the period it was let
      It doesn't have to be let out.

      If OP lives in house for 5 years, then finds another primary residence (declared as such, or based on the facts) and then sells original house 2 years later, CGT would be payable on 2/7ths of the gain.

      If the OP had owned and lived in the house for two months and then sold it 9 months later CGT might well be payable.

      In general it doesn't matter because any CGT is usually washed out by the period of residency. I can't imagine that HMRC will be seriously exercised by a period during which a sale was actually in progress, but it would depend on the duration and the gain.

      Comment


        #4
        Thank you for the responses. I have lived there since I bought (more than 5 years) and wants to move to a bigger house. This clears some of my confusion. I thought the property will be empty so why not short term let. But its better not to let while I am selling it. Thanks

        Comment


          #5
          Originally posted by Echoes View Post
          I am buying a new house to live so how much time do I have to sell my current house before CGT trigger? (buffer between selling current and buying a new to avoid CGT as I heard the new rule of 9 months)
          Perhaps the confusion here may be with additional rate SDLT? Buying a new home while still owning previous is an issue in that you will be liable for additional 3% SDLT. However, you can request a refund of this when you sell your previous home, as long as sale occurs within the permitted time - which I believe is three years.
          There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

          Comment


            #6
            Originally posted by doobrey View Post

            Perhaps the confusion here may be with additional rate SDLT? Buying a new home while still owning previous is an issue in that you will be liable for additional 3% SDLT. However, you can request a refund of this when you sell your previous home, as long as sale occurs within the permitted time - which I believe is three years.
            I thought it was 12 months.

            Comment


              #7
              I had thought it was something like that as well, until I looked it up.

              https://www.gov.uk/stamp-duty-land-t...property-rates
              There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

              Comment


                #8
                Dont forget to have the place you have lived in valued on the day you move out by 2 estate agents as you need a valuation when it changed from being your main residence to be able to work out your CGT when you eventually sell it.

                Comment

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