I shall shortly be selling my home, which I have never rented out fully, but for a few years in the 90's, I rented out several rooms for income (declared to the IR and income tax paid). I understand there will be some CGT liability because of this.
My question is, how will the IR pick up on this if I don't tell them?
PS: If it makes any difference I am self-employed. I am not a landlord - I own only this one property.
Thanks for any response - or advice!
Thanks. Better declare it then - don't want to be dishonest in this law abiding and truthful age in which we live in the UK..!!
No it's not like that at all. Subject to the 'letting relief' rules the gain is apportioned pro rata between the let period and the lived in period. The let period is taxable.
Tim
Well yes, "subject to the letting relief rules". But those rules have the effect that (some or possibly all of) the let period is
*not* taxable.S&B is wrong about the 6 months bit. There is no minimum amount of occupation as PPR which magically creates entitlement to relief, it is the quality of occupation that counts. However, the longer the period, the stronger the likelihood that the quality will be deemed sufficient.
S&B is right that an owner can move in for a short while, and then sell with no CGT being due at all, but it depends on how long the property has been owned and let.
If it was owned for a total of 6 years and let for all the time except a short period of use as main home of owner, it can escape CGT completely, namely 3 years via Private Residence Relief and 3 years via Lettings Relief, if the total gain does not exceed £80k.
but : (a) I knew you'd be along to explain fully (b) it was late, and I was tired
Tim
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