CGT treatment of let property

[confused]

Hoping for some help , am confused.
I have bought and lived in a property from 1998, in 2004 I bought a buy to let property which I have nomiated as my primary residence, 7 months later I decided to rent it and have tenants, I will be selling the property in the next few months. In all I have had the second property for about 2 years although I only lived in it for 7 months, I have never restated my primary residence back to my original house.
I understand that my second property is exempt from GCT is this true, but what about my original property is it liable for 2 years GCT when I sell it or should I renominate it back to my Primary residence stating I was only in the other for 7 months, would that make it liable for only 7 months GCT.
How would the revenue view this?

[Tax Accountant]

Hoping for some help , am confused.
I have bought and lived in a property from 1998, in 2004 I bought a buy to let property which I have nomnated as my primary residence, 7 months later I decided to rent it and have tenants, I will be selling the property in the next few months. In all I have had the second property for about 2 years although I only lived in it for 7 months, I have never restated my primary residence back to my original house.
I understand that my second property is exempt from GCT is this true, but what about my original property is it liable for 2 years GCT when I sell it or should I renominate it back to my Primary residence stating I was only in the other for 7 months, would that make it liable for only 7 months GCT.
How would the revenue view this?

If you use more than one property as your residence, the property which is actually your MAIN residence automatically qualifies as your PPR, without any nominations.

However, you could nominate the other property as your MAIN residence for CGT purposes if this is more beneficial to you. Such a nomination has to be made within 2 years of having the second residence.

Any such nomination continues in force until you revert to only one residence or if you notify the tax office to change your nomination.

In your case, your nomination in favour of the 2nd property automatically comes (or came) to an end when you started letting this property. In this event, your primary residence restarts qualifying again as your MAIN residence and will continue in force unless and until you sell it or make another nomination.

Your 2nd property qualified for PPR exemption during the 7 months it was your residence and nominated as MAIN residence. During this period the primary residence stopped so qualifying. If and when you sell the primary residence, you will have 7 months gains as chargeable gains. However, this may be reduced or fully covered by other reliefs and allowances.

The second property is exempted for the duration of the 7 months for which it was nominated as well as any of the final 3 years ownership of that property which is outside the 7 months nomination period. If you retain the property for longer than this, the excess period may give rise to chargeable gains. However, any such gains could be partly or fully covered by other reliefs and exemptions.

Ramnik

[confused]

Thankyou for your reply, can I just confirm when I sell the 2nd property which is still nominated as my primary residence how do the I let the inland revenue know that it isn't and I was there for 7 months or do I?

[Tax Accountant]

Thankyou for your reply, can I just confirm when I sell the 2nd property which is still nominated as my primary residence how do the I let the inland revenue know that it isn't and I was there for 7 months or do I?

As soon as the 2nd property stops being your main residence for CGT purposes, due to being sold or otherwise, you could write to your tax office and notify them that the main residence has reverted to your primary residence.

Be aware that this may be a trigger for the tax office to enquire into whether the 2nd property was actually your residence or not and whether there are any chargeable gains arising in respect of any other periods of ownership.

Ramnik