Anyone know anything about Second home / Capital Gains Tax?

[starzzz]

We are buying a new house, but we have not yet sold our current house. When we move into the new house, is our old house then considered a second house, and liable for Capital Gains Tax when it does sell?

Phone your solicitor

I think (but check!) as long as you sell it within three years of moving into your new home, and can demonstrate that you were trying to sell it all that time, as opposed to say renting itout, you're OK.

we are in a similar position - couldnt sell our house so have rented it out for 18 months and we were worrying about this too.

I was coming on to say the same as Titchy- that its 3 years- but do check in case the budget this week has changed anyhting.

This is exactly our dilemma too! The buyer of our house pulled out but we are going ahead with our purchase, so technically for a while we will have two homes (until our current home sells). I looked at the govt website and its a bit confusing but like titchy says I think you basically have three years to sell it. I'm going to double check with our solicitor though.

Similar here except our house in Surrey has been rented out for 15 years while we lived overseas. We move back next summer but bought a house in Somerset at the beginning of this year. Won't be selling first house until current tenancy is up in Feb. Hoping we will be ok.

someone told us that we would be ok because we have proof that it was DH's main residence before he moved out, that we tried to sell but couldnt and that it is still worth less now than when we had it valued in 2006 (when it first went on the market)

I dont know how true that is it though

I'm currently selling my house after moving into dhs house. I don't pay CGT as I only moved out last year and it had been my main residence for 10 years.

I think there is 3 years but you have to have been living there for a certain period. so you can't move into a flat for 6 m then sell it if you still have your other house.

Thanks all, id briefly got the 3 year thing while reading, but all so confusing! Would be alot easier if someone just bought our house! Will check for definate with the solicitors

if the property has ever been your principal private residence (ppr) then the last 36 months of ownership are treated as exempt for CGT purposes.
while the house was your ppr it is also exempt.
so if you sell within 3 years of moving out there is no CGT liability.

If you also have rented the house for a period and this isn't covered by the 36 month exemption (ie rent for more than 3 years, or rent for a period, reoccupy and sell after more than 3 years) then there is also lettings relief (which I'm not even going to try and explain).

and don't ask a solicitor about tax, ask an accountant.

Good advice ChasingSquirrels. My DH IS an accountant though and has no idea! I should sack him really.

As has been said, the last 3 years dont count.

Also, you and your DH each have an annual CGT allowance (around 10K) so even if you did have to pay capital gains tax, the properties value can increase very substantially before you have to pay CGT.