Capital Gains Tax Maze questions - clarification

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    Capital Gains Tax Maze questions - clarification

    Hi All,

    I am looking for some advice from the CGT experts here.

    Firstly I will explain my situaion. I have a leasehold flat that I have let for about 4 years to a good tenant. I am now getting major issues with the Residential Management Company and their managing agent so much so that I am mulling over selling the property and buying a small 2 bed house. My plan is to attempt to take the tenant 'with me' into the new property if they are up for doing this (I have not approached them yet its just an idea, would like to keep him as he's been a model tenant).

    I have had a quick look on the Gov website and read as much as I can and believe that I may have a small CGT liability of around £5000 which I need to take into account in all my calculations, if the property sells for more than I used in that calcution it just means more tax but more money if that makes sense.

    My questions are:


    Can someone confirm that there are no reliefs when you sell one rental property to buy another (I saw a post about this elsewhere in PT and that was the indication but there was only 1 reply)


    Can we deduct any amounts spent on the property in terms of improving it, I thought this was possible in the past. I have'nt spent much thankfully but would take this off the calculation if its allowable


    Has anyone moved a good tenant from one property to another in the way I am thinking about?

    I have looked into the possiblity of moving back into the flat but this would mean little difference from what I have read (for example declaring it as your main residence). It would be a pointless exercise.

    With regards to the problems I have there, it would take too long to explain I have posted elsewhere in PT but I am at the point of mulling over selling the flat because I see nothing but long term problems. I have considered contacting all the other leasholders but I am now beginning to way up the hassle of this and I have for the time being decided to put things on hold, especially as I am sure that if I decided to sell this would come up in any legal paperwork and I have to declare the problems. Not only would this 'alert' potential buyers to the issues there but would almost certainly put buyers off or mean low offers.

    It's very annoying because I wanted to try and get the problems sorted out but once you start this sort of thing there is no going back. They have already instructed a solicitor but I have now put engaging with them on hold as I am thinking over just jumping ship so th speak. If I kept the property I would also have to spend money at some point on it regarding the possible EPC C upgrades. The boiler is also anicent so by the time I have paid out for all this I am probably looking at £10-15 k anyway. The flat is in a nice area and should be very sellable so I might be able to balance it alll out with a bit of luck on the purchase.

    Any help and advice would be much apprecaited.



    1 - That's correct.
    2 - You can offset capital expenditure (that you have not also claimed as operating costs).
    3 - No and I've never heard of anyone doing it either.
    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).


      Its a good idea if you can persuade the tenant to move to your next property.

      It means you can sell current property with vacant possession.


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