CGT question

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    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.

    REgards.

    #2
    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.

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

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