UK Landlord Forum / Life

Hi guys.
Does anyone know anything about Capital gains tax. Its an area I know nothing about and would like to know more. Internet isn't really coming up with much it's really brief and doesn't answer specific questions.

All I really know about it is that if you have more than one house (asset) then you have to pay tax on the difference when you sell it.

Now what I would like to know is on which properties? I know that it doesn't count on your main property? Is this correct?

My problem is I am thinking of moving into the property I am about to buy as its a lot nicer than mine but my thinking is in the future that may not prove such a good idea.
If I was to move out of the house I live in now the difference between its sale price and its selling price would be far higher than if i was to move into the newer house and then sell that one.

I hope that makes sense. So my main residence I have lived in all the time and was the cheaper house. The one I am buying now is a lot more expensive so I would be taxed less on that if I was to sell it on.

I am just thinking out loud and for the future really but its a worry.
Regards
Paula

Yes you pay tax on all property gains... BUT you get PPR relief, that is principal private residence relief.

You are now living in Property A, you bought it for 100k, its now worth 200k. All that gain is tax free.

You buy property B for 200k and move in and let out property A.

In 10 years time you sell both for £400k each.

You pay tax on property A only from the £200k when you left, to the £400k when you sell.

Property B's gain is tax free.

Interestingly though, as you have lived in Property A, you can move back in for 1 day only before sale, and get 3 years extra relief. So instead of paying tax ( adjusted ) on 200k, you pay it on only 10year - 3 years divide ten years... 70% of the 200K or £140k.

Basically you need to get a valuation done, shall we say a generous valuation done, and keep hold of it, at the time you move out, as any gain up to the point you move out is locked away, tax free.

Hi,
A valuation, Now that is a good idea.. Thanks for that. Will that hold up though? An old valuation from an estate agent.

I just didn't want to move into the new one and then get shafted later on.
I am trying to think about all angles in all this.

Yeah it will hold up.

Get an Estate Agent or three to value it, and write to you with a proposed marketing amount. Keep these.

There is no way the Inland Revenue can really challenge this without allot of expense, provided its reasonable.

Before Hippo says what the Estate Agent says it will market it at, isn't a valuation. I know that. But its directional, and saves spending £400 on getting a qualified surveyor to give you a valuation ( although this is an option, like you have done if you are getting a mortgage)