UK Landlord Forum / Life

Hi there.
I know this is a very tricky subject but I just cannot get a straight answer out of anyone about it. And research doesn't come up with anything either.

Does the rule still exist that you can move into a rental property for a certain amount of time (18 months) to then make it your primary residence to then circumvent CGT.

Please feel free to contact me directly with any help of advice about this.

Thanks

You can't circumvent CGT.
The gain is calculated over the whole period of your ownership and split between the period when it was your main residence (plus nine months) - where there's no taxable gain - and when it wasn't (less 9 months), when there is.
Nothing can change that (including, for the avoidance of doubt, moving in for a period).

If you do move in for 18 months, you'd obviously increase the proportion that won't be taxable.

I have had people in the past say that they have moved back in to avoid it all.
And I have heard that from more than one source over the years.
I'm just trying to get clarification of it all.
Does that still exist or not?
thanks

And sorry I know its a dodgy question.

Quote from: paulaa on October 11, 2022, 08:55:55 PM
I have had people in the past say that they have moved back in to avoid it all.
And I have heard that from more than one source over the years.
I'm just trying to get clarification of it all.
Does that still exist or not?

No, they closed that loophole many years ago because it was so easily exploited.

Quote from: Simon Pambin on October 12, 2022, 07:45:58 AM

Quote from: paulaa on October 11, 2022, 08:55:55 PM
I have had people in the past say that they have moved back in to avoid it all.
And I have heard that from more than one source over the years.
I'm just trying to get clarification of it all.
Does that still exist or not?

No, they closed that loophole many years ago because it was so easily exploited.

Thank you SImon that's all I needed to know. Clarification that it was a thing and now has been shut down.
Shame as it's such a big bill for proving a service.

I don't think the rules have ever worked like that.
People just claimed that the property had always been their residence and, given the nature of record keeping in the 20th century, it was hard to prove otherwise.

Quote from: paulaa on October 12, 2022, 09:17:05 AM
Thank you SImon that's all I needed to know. Clarification that it was a thing and now has been shut down.
Shame as it's such a big bill for proving a service.

As JPKeats says, it was always a bit on the janky side. There was this notion that keeping a toothbrush in a property for a couple of nights was enough to confer PPR status on it, which, coupled with lettings relief (when that was still a thing) meant that you could magic away a fair old chunk of your CGT liability. It was dishonest ... but you could get away with it.

It is a substantial bill, and I've banged on before about the shortcomings of the current CGT system but, at the end of the day, it's a bill for providing a service at a profit. It's just another cost of doing business.

Thank you all for your comments. I know its always been a dodgy topic and I have asked before and never got a straight answer.
It was usually a case of if you had bills in your name for say 2 years it was all win win. But as you say rules change and things get harder.
I actually stopped renting it out last year and moved my mum in cause dad died and she needed to be nearer me. So that could also prove difficult. and no she doesn't pay me rent.

The fraud got much more difficult as records became computerised and connected.
And council tax and changes to income tax have made it much more difficult to get away with.