Capital Gains tax

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    Capital Gains tax

    Please help me as I am struggling. I bought my property 4/5 years ago for £357k I have slogged hard to make it nice and now the value is £600k.
    I have had to find a new job as my current role has come to a end, The new role means I have to rent out my current property and rent a new property which I did not see an issue, I then google and alarms are ringing hard. I need to pay 40% on the profit from the rental which is criminal in itself, I hope to sell mine in roughly 18 months and will not be going back there if possible as we will do the full move when I save the stamp duty, I am now panicking badly that I will have to pay CGT on the 250k I have made at the 28% I am seeing, if this is the case I will be finished as I wont be able to take the job and I will out of work, why is this Government hitting me so hard. This has had me and my partner in bits all weekend and I am beyond stressed out.
    I have had a valuation on my property so its clear to see the profit will not be for the time I rent. The government website is completely contradictory and I have no idea what to do.
    Somebody please help me.Thanks

    Why not sell the property of instead of renting? There is no CGT on your residential property so sell and you will be a cash buyer when you come to buy next time.


      Private residence relief means you'll only pay tax on the percentage of the gain that you didn't occupy the property.

      IE 5 years of 6.5 (by the time you sell) is tax free,

      See example on

      But sell now, no point renting a remodelled house for 18 months, as a first time landlord, while living away no less. Doesn't make sense, especially with the market riding high.


        If your current job has just ended , your annual income with rental income will fall below £50K. After deducting the personal allowance of £12,500, Your remaining taxable income will be taxed at 20%.


          Hi Lesney , Thanks for the link, this is the crucial part, going back to my original post.
          when I follow the PRR qualification its not exactly clear.
          1. I fall into the working away bracket and working in the uk for up to 4 years so this says I need to select that I HAVE NOT LIVED AWAY.

          2. This is cruncher (Have I let out any part of my home) yes I have let out 100% but then under letting part of you home it asked what percentage have you lived in, (I LIVED IN ALL OF IT )

          I read this as question is N/A to me and question 3 allows full PRR based on i need to move because of my job.

          This really is not clear.

          I will see the house at some point but I need to secure my new job first before I go down this road, as well as I dont have time to sell this and buy before my start date.

          Any advise is welcome.


            You only pay CGT for the period that the property is being let, not while you live/lived there.
            So if you bought it 4 years ago and sell in 18 months, you'll pay CGT on 1 year's increase in value (you get an extra 9 months relief) and pay no CGT on 4 1/2 years increase.
            So you'd pay tax on about £45k, which would be just under ten thousand pounds.

            Obviously if house prices increase over the next 18 months the figures will all be higher.
            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).


              How can I pay them 10k plus. I have to pay the 40% of the rental value over the 18months which is a further 12k I am working away for the MOD and being hit with 22k in tax , I cant afford to do this and will be out of a job , the part that is not clear is if you do the PRR calculation is question 4 Have you let any part out of property out , the answer would be yes but I have not let a part out , i have the whole thing out, it makes no sense as question 3 then says I will be classed as living fully, it contradicts itself, as it can be read several ways. totally not clear. I need somebody legal to answer this .


                You don't pay CGT until you sell the property, at which time you have the other 72% of the gain to enjoy.
                Same with the income from the rental, you get the other 60% - and the rest of your income, which must be OK if you're a higher rate tax payer.

                I'd pay an accountant for some proper advice (you need tax help, not legal help).
                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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