CGT with a twist

[uuf361]

OK, so this isn't me but doing some research on behalf of friends......

In the process of splitting up and will be divorcing.......and own a main residential (which will be sold but not soon), and they have a BTL - owned by one half of the couple prior to the marriage (and now owned for 20 years ish in total).

Now in joint names.......if one half of the couple was to live in the BTL while the main PPR was being built then sold what would be the minimum of time they would have to live there (and they would be living there full time) before any CGT charge was erased on sale ?

I'm guessing 2 years ?

Any help appreciated

[Eric Mc]

NO minimum time. Once a person moves into a property and shows INTENTION that it is to be their main residence, it starts picking up the CGT expemtions.

[uuf361]

Eric Mc said:

NO minimum time. Once a person moves into a property and shows INTENTION that it is to be their main residence, it starts picking up the CGT expemtions.

Mmm, OK but if they were to sell it 6 months after moving in how would that be viewed - this would only be after main residence was sold to divide everything up in 2 and start again.....

[Eric Mc]

That depends.

If you REALLY intended it to be your main residence but circumstances forced you to sell it after six months, HMRC would accept as your main residence.

[uuf361]

Thanks...

[The jiffle king]

uuf361 - For the BTL property, once the person moves in, I think it only then starts being their main residence. The time before that will still need to be accounted for in CGT terms. I might be mis-reading your question, but if they have had this for 20 years, they will pay

20 x 12months (240 months) CGT and then start accruing time which is free from CGT from the time they move in.

I just want to check my/your understanding on this with Eric
Thanks

[Eric Mc]

Essentially, that is correct. However, once a property is established as a Main Residence, the period you have lived there PLUS THREE ADDITIOBNAL YEARS is removed from the CGT equaition.

[uuf361]

It's been residential then rented then would become residential again........

I've done a few calcs for them now and think they will be better off just selling it and moving on separately and paying what won't be a massive tax bill, esp using the allowance for the tax year...