Question about CGT ...

[SimoN138]

Hi,

Hopefully one of you can help me on this. I have owned a house (with mortgage) for 12 years. for the first 9 years it was my home, 3 years ago i moved out and rented the propery to a tenant (and bought another property as my main residence).

i intend to sell the rented house this summer and will have made a gain.

i realise i have a capital gain liability but my question is, will the liability be reduced as i was resident for some period? (i.e. 25% of the gain as i was resident for 9 of the 12 years owned) - or will a nominal value be attached to the property as at the date i moved out to calculate the gain, or (worst case) am i liable to tax on the full gain for 12 years dispite having lived there for most of the time.

any help appreciated. many thanks

si

[Paul Dishman]

I'm pretty sure that you don't pay any CGT if you sell a property within two years of moving out so you may only have made a gain over the last 12 months, less your CGT allowance

[Eric Mc]

You always get three additional years "free gratis" when computing the taxable gain on a property that was once your main residence.

If you owned a property for (say) seven years, lived in it for four and rented it for three, theoretically, 3/7 of the gain would be taxable. However, you get the three "free" years as well meaning that the four actual years plus the three free years means that the property will be completely exempted from CGT.

[SimoN138]

that's great - thanks for the info guys

si