Capital gains tax question

[Redtelephonebox]

if you rented the property out then moved in yourself for a week would you avoid CGT?

only asking as the owners have made over £250k equity in 2 years, tenants moved out and they are moving in for a week while the sale goes through!!

Just wondering even though I know it's none of my business!!

it's not that simple.

the chargeable gain is worked out by the ratio of the overall time owned and the amount of time it was rented out. The last 18 months of ownership is added to the overall time owned, reducing the liability.

then there is private residence relief. Then there are the annual CGT allowances for each of them.

regarding moving back in to turn it into their private residence (which would mean no CGT payable) - there's no actual time limit but the feeling is that you need to really live there, i.e be on the electoral roll, pay the bills, etc etc. You can't sort all that in a week so my guess (and it is just that) is that they just want to save on a week's hotel bill.

sorry if this is a disappointment, I know it will be to some on here.

I think there's a high likelihood of HMRC disputing the main residence claim if the only period of occupation is a week between the sale having been agreed and it actually going through. There has been a case that went through the tribunal and got the relief with two weeks of actual occupation but what the tribunal looked at was the intention of the person claiming the relief. In that case the person always intended to live there but a change in family circumstances meant he couldn't afford it.

Yeah, intention. They may claim some PPR and also lettings relief, which if there's two of them may be another £80k deduction, but if HMRC look at it they won't succeed.

They can't claim it as their principal private residence AND lettings relief, one or the other.

Won't work as PPR, but the lettings relief and CGT relief will reduce their CGT liability. As noted, if the place is empty, why pay for a week in a hotel?

You only get lettings relief if you get PPR. No PPR, no lettings relief.

Agree with LMLytton. Letting relief is only available if some PPR is claimed.