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Capital gains tax on house sale ? advice please.

Hi , i was speaking with someone today , who kinda knows what he's talking about , basically i own my house that i live in and i'm thinking about buying a 2nd property to rent out , any way he said i'd be better for tax reasons to move from my house into the other house that i would purchase and live there for around 2 years and rent out my current property, as i would then avoid capital gains tax on my current residence if sold and also in my new property when i come to sell or indeed ever sell , simply by living at the property for some time..... so i kinda guess if this is the case , if i want to avoid capital gains tax on any house sale in the future , i guess if i buy a property live in it for two years then move on , rent that one and buy another etc etc .....i presume this to be incorrect , but tax rules are a funny thing.

But i was wondering if this is indeed the case , is there some kind of time in which i have to sell my first property or is it fully exempt from capital gains tax as i have lived in the property for around 10 years......can anyone confirm this or can reccomend anyone i should speak with such as the tax people etc ?

Reply to
TV MAGIC
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In message , TV MAGIC writes

He doesn't know quite as much as he thinks. Your principle private residence is exempt form CGT but if you move out of it and rent it out then the gain is taxable in direct proportion to the period that it was rented out and when it was your PPR, BUT you get an extra 3 years of PPR as well.

So, Live in house for 4 years, move out and rent it out for 5 years. Taxable gain is Actual Gain x (4 + 3) / (4 + 5). You may also get letting relief.

So if you sell the house within 3 years of leaving it you have no tax to pay on it but you will only get one lot of direct PPR at a time.

(A Mr R.Raygun will be along in a minute and explain it far better than me).

(Just dont forget I taught him everything he knows................................

Reply to
John Boyle

You'd be better off talking to an accountant about your plan and they could inform you of all you need to know.

Do you really want to be moving home every few years?

I moved into my present house seven years ago and I've got it just how I like it. I don't want to move again.

Reply to
Peter Saxton

"John Boyle" wrote

Did you teach him how to "explain it far better" than you? ;-)

Reply to
Tim

He did. He said: "Don't do it like me"

Reply to
Peter Saxton

In message , Tim writes

:-)

Reply to
John Boyle

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