CGT question

  • Filter
  • Time
  • Show
Clear All
new posts

    CGT question

    Hi there,

    Please can someone help me with advice on Capital Gains Tax.

    Here is my situation.

    Before October 2006 I did not own any property at all.

    In October 2006 I bought a flat with a buy to let mortgage. That flat was immediately let out and I still own it, tenanted.

    In December 2006 I bought another flat again with a buy to let mortgage with the intention to let it ou.

    After some refurbishment works at the second flat I had it valued recently and it has gone up by £50,000. As this is a substantial increase I would like to sell it instead of letting and use the proceeds to reinvest in another property.

    I think I would have to pay CGT on the £50K profit but what if I lived in the property for a few months as my principal private residence and then sold, would that be sufficient to avoid CGT?

    I know I would first have to ask my lender for permission to live in the flat because I have a buy to let mortgage.

    Any advice/tips gratefully received.

    Many thanks.


    If you genuinely use it as your ''only or main residence'', you could benefit from PPR relief. Additionally, you may also benefit from lettings relief if you also let the property.

    You may perhaps need to change the loan to a residential mortgage. Also, although no specific period of residence is stipulated, you would be well advised to use it as your residence for 12 months or longer. You will also be well advised to have bank, tax, employer address changed to this property.

    You should also read up on the ability to make a nomination for ''main residence'' where you actually use more than one property as your residence and the nominated property is actually the secondary residence.

    It is best to take professional advice. You could send me a private message if you wish.

    Private advice is available for a fee by sending a private message.


    Latest Activity


    • Reply to Let Property Campaign.
      by theartfullodger

      Well done HMRC..

      None of my business, and obviously not in anyway a criticism of anybody, but If I had had a friend who I found out had been fiddling tax for 16 years they'd no longer be my friend.
      18-09-2021, 11:46 AM
    • Let Property Campaign.
      by armour
      Hi all,

      A friend of mine has been renting out a flat since 2004 and has not declared any of the income to HMRC in all that time.

      She wants to come clean and pay the accumulated income tax she owes by making a non-prompted disclosure using the Let Property Campaign system....
      13-09-2021, 13:45 PM
    • Reply to Let Property Campaign.
      by armour
      Fair enough. Thanks for your advice. It is on cash basis.

      I guess it would only save her 50 odd quid anyway, maybe less than £80 once the fine and interest is added. I guess she'll have to swallow that.
      Once again, thanks JP and Gordon for your help.
      18-09-2021, 09:07 AM
    • Overseas Landlords
      by Santa Fe
      I'm from UK but live overseas and recently discovered that I should be registered as an overseas landlord. I've done a bit of research on what it involves and it seems a bit of a headache - tenants have to fill out forms and pay tax from their rent direct to HMRC. If anyone here is registered as an...
      16-09-2021, 16:44 PM
    • Reply to Overseas Landlords
      by Santa Fe
      Boletus, thank you.
      17-09-2021, 18:37 PM
    • Reply to Let Property Campaign.
      by jpkeates
      armour - Sorry, I don't know.
      It might depend on whether you're accounting on the cash basis (in which case I suspect not) or the accrual basis (when it's possible).

      But it's not something I ever got involved with when the W&T allowance existed, and all of the practical guidance...
      17-09-2021, 11:43 AM
    • Reply to Let Property Campaign.
      by armour
      Thanks JP, that's clear. I'll put the bathroom in with the income tax then. I guess it's much of a muchness anyway as the associated reduction in interest and fine will probably equal out.

      I have one last question, if you'd be so kind.

      During the year she had to make the eviction,...
      17-09-2021, 09:18 AM
    • Reply to Overseas Landlords
      by boletus
      You fill out this form requesting to have rental income without deduction of tax and pay it yourself;
      16-09-2021, 17:26 PM
    • Reply to Let Property Campaign.
      by jpkeates
      The 10% was for furnishings, so built in stuff should be ok to claim.
      The bathroom refurb depends on what was done if it was simply a replacement, it's maintenance, if it was a significant upgrade, it's likely to be part capital/part maintenance.
      If it's a new bathroom, it's probably ca...
      16-09-2021, 08:37 AM
    • Reply to Let Property Campaign.
      by armour
      Seems pretty clear there JP. I'll go ahead and alter my calculations

      One more thing, My friend had a bathroom refurb and a built in oven and hob replaced during the period when the flat was let furnished. I'm pretty sure that these costs can be detucted in addition to the 10% W&T, but...
      15-09-2021, 14:06 PM