Will tax be payable once we move out?
Question
I have owned a buy-to-let property for four years. However I've recently re-mortgaged the buy-to-let property and realised that we might need to move in genuinely for a few years and move on to a bigger house later. After living in the property for one year and we move out, will I have to pay capital gains tax?
Arthur Weller replies: If the house genuinely becomes your principal private residence (PPR) then you will be exempt from capital gains tax on the eventual sale of the house for: (a) the one year period you actually lived in the house as your PPR; plus (b) the last 18 months of ownership (unless this overlaps with the one year); plus (c) you will be eligible for lettings relief for the period the house was rented out (unless it overlaps with the 18 months). The rest of the capital gain will be chargeable on you. |