Any experts? Capital Gains

[Prawninmyside]

DH and I moved for work 2 years ago. We were unable to sell our old house quickly so decided to rent it out, using the income to pay the mortgage on the new house.

The sums just about add up, the rent after agents fees is the same as the mortgage repayments. Sometimes it's less as we've had to pay for the upkeep, a new oven, shower valve etc.

Our tenants have given us notice and we can't decide if we should sell it or rent it again.

CT seems to be an issue. Would we pay on the increase from when we bought the house in 2001 on when it stopped being our primary residence in 2014? DH is in the higher tax bracket, I'm in the lower and the property is in both names.

We're really not sure what to do.

It used to be the case that you paid from when it stopped being the primary residence, but also that the final 2 years used to be disregarded. There was also an annual allowance. I'm not sure if the current position is different though.

Cgt. Tax is proportional on profit made between purchase and sale after deductions for acquisition + disposal costs (and capital improvement investments).

All time it was your primary residence is waived.
Last 18 months is also waived irrespective of use.
About 10K per person of cgt allowance per year can also be used (can bump up with carried forward losses if you have any of those) is waived
Lettings allowance of up to 40K per person who owned during time of primary residency may also be waived (check hmrc fact sheet using your exact numbers for this figure)

Any remaining gains taxed at either lower or higher rate depending on your marginal rates of tax

Thanks, I think I understand
Would you sell or rent again?
The renting market looks stronger than the selling round here but of course the EA will tell us they can flog it.

The rules on second homes are about to change and will only become more punitive. The CGT is only chargeable on the period since it was last your primary residence and there is a period of grace and allowances which may mean your liability is currently minimal. Unless the local property market is booming or you may return in next few years I'd sell.

Agree with LIZS, CGT should only be applied during the period it was let out. As that was only two years ago, you may find the CGT will be fairly small. I'd also sell in your position.

Thanks for the comments. Looking on right move there isn't much for sale, but maybe that'll work in our favour.
We won't move back to the area.