Capital gains tax- property in London

(14 Posts)
Stilldreamingofsun Wed 28-Sep-16 15:30:05

Dear all,
DP and I have lived in Europe for the past year and a half. We currently rent out our flat in SW London. However, we are moving back to London in 6 months. I am due a baby in four weeks so our flat will be quite small and we have already decided we want to sell and buy something bigger in the countryside. In an ideal world, we would sell the flat in London and rent a much cheaper place in the area we want to live in (at a fraction of the cost). We want to avoid paying the capital gains tax of 18%. Any ideas how we can get around this or do we have to move back into our flat in London initially?
Thank you.

HermioneWeasley Wed 28-Sep-16 15:31:52

You should take proper advice from an IFA or accountant and not randoms on the internet

Stilldreamingofsun Wed 28-Sep-16 15:33:33

I agree! I'm not sure who I should be speaking to! Do you have any recommendations?

Chippednailvarnishing Wed 28-Sep-16 15:37:44

How many properties do you own?

Stilldreamingofsun Wed 28-Sep-16 15:39:45

Only one

MrsHulk Wed 28-Sep-16 15:40:35

If it was your main residence at some point in the last three years I believe you don't pay CGT. You can find lots of guidance on the HMRC website, and if you need further advice you can look for a tax accountant.

atticusclaw2 Wed 28-Sep-16 15:44:16

depends on how long you've rented the flat out for.

Stilldreamingofsun Wed 28-Sep-16 15:48:04

Yes- we have lived in it in the past three years. We have rented it since April 2015 (about 1.5 years)

atticusclaw2 Wed 28-Sep-16 15:49:31

AFAIK you'll be fine then. But you should still check with a financial adviser.

FinallyHere Wed 28-Sep-16 17:50:17

If you want confirmation, I think a tax lawyer would be better placed to advice than a financial advisor.

BadgerFace Wed 28-Sep-16 20:21:28

The rules have changed so you only get the extra exemption for principal private residence relief for the final 18 months of ownership rather than 3 years. You should get lettings relief as well from what you've said. Coupled with your original occupation period this may well bring the taxable gain down to nil, or within your annual capital gains tax allowances. Any good accountant will be able to run the sums for you.

JacquettaWoodville Wed 28-Sep-16 20:23:38

Google "capital gains tax rules for principal private residence" and that should help.

dontcallmethatyoucunt Sun 30-Oct-16 21:38:56

tax lawyer or financial advisor er no, an accountant.

Frolics82 Tue 01-Nov-16 00:03:48

You could just ring up HMRC directly - I've found them very useful at clarifying things for me in the past.

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