1. Home
  2. UK Finance Discussions
  3. Selling a house - CGT

Selling a house - CGT

Hi all,

Yet another question about CGT - sorry ;-)

I have a small terrace house that I lived in until last year but is not now my principle residence. The house was gifted to me about 4 years ago and is currently rented out and the income declared on my tax.

I am looking at selling it and adding a bit extra to buy a bigger house in a less expensive area.

My questions are:

1) Would I have to pay CGT if I was reinvesting the money into another property? 2) Would I have to pay CGT on the full sale price?

If I have to pay a substantial amount of CGT would it be better in your opinions for me not to sell the property but instead to get a mortgage against the value of the house?

Sorry for all the questions but any advice would be greatly appreciated!

Thanks

John

Reply to
John
Loading thread data ...

(1) is irrelevant as to whether you pay tax or not.

Reply to
Tumbleweed

  1. Reinvestment will not reduce the CGT. However, as it has been your PPR, the last 3 years of ownership are exempt. This should mean that no CGT is payable if the sale takes place within the next 2 years.
  2. No - only on the gain. The "gross" gain is the difference between the sale price and probate value - less allowable expenses and other reliefs (e.g. taper relief and Lettings Relief).
Reply to
Doug Ramage

"Probate value"?

Reply to
Ronald Raygun

Doug,

Many thanks for the reply - can I confirm that I haven't lived in the property since last year - is your response still correct and no CGT would be payable?

Thanks again

John

Reply to
John

Um, where did that come from? Dealing with a few Wills recently, so must be in my sub-conscious. :)

It should be market value - unless the "gift" arose from the Will. :)

Reply to
Doug Ramage

Yes, the property only needs to be your PPR at some time to qualify for the last 36 months exemption.

Reply to
Doug Ramage

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.