Capital Gains

[JadeFeather]

Hi

Planning to sell my flat and just trying to work out how much CGT I will have to pay.

It's my only property but I let it out for 10 years whilst living with my family. About 2 years back I moved in there for 8 months but subsequently let it out again. Will this make any difference to the CGT bill?

Thanks

You need to ask an accountant.

Was it your only home during those 8 months? Were you having bank statements etc delivered there and were you registered for council tax, utilities and so on? If so, then it should make a difference although I've only ever experienced this for properties we lived in before we rented them out.

If the same rules apply then any gain made will be divided into the number of months you have owned it and those 8 months PLUS the last 18 months of ownership will be deducted from your CGT liability. So, if for argument's sake, it sells for £120k more than you paid for it that is an average rise of £1k per month. So from that £120k you can deduct £8k that represents the time you were living there, plus £18k for the final 18 months of ownership bringing your liability down to £94k. As you also lived there, you will get a further £40k exempt bringing your liability down to £54k and from that you can deduct your CGT annual allowance (£11,100 this year) which makes the amount that you can be taxed on to just under £43k.

Of course, you can also deduct items such as stamp duty, estate agency fees, money spent renovating it for rent (prior to renting it out) etc before you start working out the gain. Hope that helps.

Thanks lalalonglegs. That's useful info. I was paying the council tax and utilities during that period however did not change my address details at bank as I don't receive paper statements and wasn't 100% sure how long I intended to stay there. Hopefully that won't count against me. I've read about people letting out a property they previously lived in but wasn't sure whether the same relief applies if you move in some time in the middle.

You are going to have to speak to an accountant as there are rules about what is your main home and how you 'elect' it- whether you actually lived there and paid bills or not.