When you retire and downsize home, do you pay tax on the difference?

[KievLoverTwo]

Please excuse my very basic knowledge, I am trying to get my head around these things. This is for far, far in the future, fyi. Decades. I like to be prepared :)

Let's say you own a big house worth 600k and you want to buy a bungalow for 300k.

I understand you need to pay stamp duty on that bungalow when you buy it.

I understand your state pension is tax free if it is your only income.

If you have a private pension or other income that takes you over the threshold the state dictates to be an income, you pay tax on the difference from your private pension. 20%, I think.

But what I don't know is, the 300k (minus stamp duty) that you gain from leaving big house to moving into bungalow - is this also subject to a tax? Tax as an income, therefore a lump sum, eg 20%?

I have googled and googled but it is not being my friend tonight!

Tyia.

You don't pay capital gains tax on your primary residence. You do on a second home. So if you also iwned a rental or holiday home and sold that you would pay cgt.

No - they haven’t invented a Tax for that kind of sum of money. It won’t be Capital Gains Tax, it’s just the difference in the cost of two properties

If it's your only home I don't believe it is taxed. You pay Capital Gains Tax if you divest yourself of property and own more than one building but if there's no other property it's not considered a capital gain.

No, not if the home you are selling is your primary residence.

If you put £300k in savings accounts at current interest rates of 5%, say, you would get £15k of interest a year. You get an extra £1k tax allowance for interest earned on savings but the rest is added to your state pension and private pension as your total income and any above your personal allowance would be taxed.

However interest in ISAs is not taxed, and winnings on Premium Bonds are not taxed.