Capital gains tax and tied work accommodation - anyone an expert?

[PippaWilliamm]

I’ve been trying to work this out and can’t! I’ll pay for an accountant but wondered if anyone else has been through this and can help.
My DH works in a boarding school where he is required to live in a flat at the school. We have lived there as a family for 9 years. 5 years ago we decided to buy a house locally in case anything happened with his job, and for us to live in when the time came to change jobs. We have rented it out the whole time. Our intention was always to live there but now that he really is leaving the job, we think it would be sensible to downsize to a smaller house as the cost of living and lack of expected pay rises means that it would be a real stretch in the bigger house with a bigger mortgage.

According to this HMRC page

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64555

as our intent was to live there, we are can have private resident relief and not pay CGT? But other stuff I’ve read suggests that’s not true as we rented it out and never lived there.

Has anyone been through similar and actually know? I have had conflicting advice so far!

You can look up CTA’s here - https://pilot-portal.tax.org.uk/utilities/ciot/find-a-member

Make sure you get a few quotes, fees can vary massively!!

Just an update in case it helps anyone. I forgot to do it at the time. I spoke to HMRC directly and had it 100% confirmed that we do not need to pay CGT and do not need to have lived in it.

You need to live in a property to get PRR
Intention is irrelevant

If you’ve owned it for 5years and never lived there the cgtax is for the full period
If you move in for a while you get that period you lived in it as PRR plus the last nine months is also free
So id move in for a while. If you have to move elsewhere for work etc then whilst it’s up for sale the last 9 months will be free because at some point you lived there
Make sure you have evidence. ie council tax bills etc

Ive been through this 5 times

Is that because of your dhs work or something ?

@WhatsAWeekend you are completely wrong. 😃 Please do talk to HMRC if you want to discuss it.

That’s why I asked is this because of your dhs work
ie that you didn’t have to pay
Im aware armed forces for example are exempt.
So
Is this because of dhs work ?

I’ve paid up all my cgtax over the years so not relevant to me anymore. Just interested

As an edit as I’ve just remembered
We bought a house for ds about 7years ago. He intended to live there in the near future but in the end didn’t.
It was never rented
We had to pay cgtax. But his situation didn’t require him to live in for work. We told Hmrc all of this re the intention and the property was in his name
Hence my question

@WhatsAWeekend I have been told same as you this week.

tenant farmers, live in rented on farm. Bought a house five years ago to retire to. DH had accident January, we need to buy a home. Selling the small house we bought, full CGT due.

now you mention farmers
My dhs work partners parents had the same
They moved in on retirement but had to pay cgtax when they moved on
They did rent out the property when they were tenant farmers elsewhere. So how odd they had to pay? 🤷‍♀️

Ok
Heres the Govn advice
It is related to employer requirements to live in
If it’s rented at any point that period is liable for cgtax

‘ The Rule: If your employer requires you to live in tied accommodation (e.g., as a boarding school head or housemaster) to perform your job, HMRC treats this tied accommodation as your main residence. 1, 2, 3, 4]
Never Moved In: Even though you never actually lived in the other property you bought, PRR can still apply if you originally intended to move into it. This concession exists to help teachers on the housing ladder stay protected when working in tied housing. 1, 2]
Caveat: To qualify, the property must remain unoccupied, or used only as an occasional base. If you rent it out, the period it is tenanted will be subject to CGT

So I think @pteromum if you get a letter or proof that you were required to live on the farm you should approach Hmrc and question why you have to pay

Did you read the OP @WhatsAWeekend ?

Yes

Ive found the Govn website advice now that sorted out the confusion that myself and @pteromum were discussing

All Good
Thanks 👍

If you RTFT
this was sorted a while ago
but thanks

charming. If you had RTFT you would not have needed to ask in the first place (as OP queried with you 3 posts above...).

Like I said
If you RTFT this was sorted a while ago 🤷‍♀️ to answer mine and another posters confusion
Have a nice day

@PippaWilliamm I really can't see that intention to live in the house is relevant here or the fact that you've lived elsewhere in work accommodation. It's basically a rental property as you have never lived in it and it's been rented out the whole time. So CGT will apply to the whole gain, there is no private residence relief to offset.
Don't forget you can deduct your buying and selling costs for the house from the gain plus the cost of any improvements you've made to the property (check what's dedectible if so).The CGT is calculated on the net gain so might not actually be very much at all after only 5 years.

The higher price you get in eventual sale if you are living there, compared to the difficulty you will have finding a buyer and agreeing an acceptable price if you market it either with tenants in situ or empty, will more than pay for the costs of moving twice. You may be able to make it easier by keeping some of your stuff in storage until after the 2nd move

I am sorry but you are utterly incorrect as OP has already confirmed by direct confirmation from HMRC

The initial OP already included the correct explanation - they lived in Employer provided WORK RELATED accommodation and therefore fall under the rules of the link included in the OP: intention to occupy and work related .....

• resides in living accommodation which is job-related within the meaning of S222(8A) TCGA92 to S222(8D) TCGA92 and
• has an interest in a dwelling-house which they intend to occupy in due course as their only or main residence

I "reawakened" this thread to address the subsidiary comment by another poster.

Thank you @Wot23 - you were correct all along but I sought further advice from HMRC as you suggested at the time!
@Tastycelery the fact we were in work accommodation is entirely relevant - that’s the whole point! As confirmed by HMRC, no CGT needs to be paid. You can call them too, or read the guidance posted above if you don’t agree.