Capital gains on house in Spain

[ash.ane]

I have decided to sell a property I owned for 5 and lived in for three years, And use the equity to purchase an apartment in Spain. On the sale does the solicitor allocate the funds to the deed owner, Inland Revenue, and then me? Or is up to me to come clean and pay the capitol gains tax. Is their any tax to pay? How is capitol gains worked out?

[Sandi]

You should be ok and not have to pay capital gains tax as the property was your principal private residence for three years and two years will be treated as deemed residence for CGT purposes.:)

[Tax Accountant]

You should be ok and not have to pay capital gains tax as the property was your principal private residence for three years and two years will be treated as deemed residence for CGT purposes.:)

You should be asking the tax questions in the tax thread.

If you used the property as your only or main residence at any time in your ownership, the periods of actual residence plus the final 3 years are exempted from Capital Gains Tax.

I assume that you lived in the property during the first 3 years. If so, you have further 3 years after moving out before you need to even think about CGT.

In fact, due to Lettings Relief and taper relief, you may not have any CGT to pay even if you decide not to sell the property for quite a few years yet.

I hope this helps.

Ramnik

[Jacob Oliver]

On a similiar thead

I own a house which is divided into 2 self cotained flats

I live upstairs (own residence) and on the ground floor the flat has been let by me for a number of years.

I intend moving downstairs while the first floor flat is being refurbished, which will take about a year. Then I intend to sell both and use all funds to buy one own residence.

Is there anthing I can do to minimise my Capitail Gains tAX and which property am I likely to pay CGT Any advice or source would be appreciated
:confused:

[Tax Accountant]

On a similiar thead

I own a house which is divided into 2 self cotained flats

I live upstairs (own residence) and on the ground floor the flat has been let by me for a number of years.

I intend moving downstairs while the first floor flat is being refurbished, which will take about a year. Then I intend to sell both and use all funds to buy one own residence.

Is there anthing I can do to minimise my Capitail Gains tAX and which property am I likely to pay CGT Any advice or source would be appreciated
:confused:

Not you as well posting tax questions in the Finance & Investment thread. Do you not know that there is a separate tax questions thread?

Your two flats are effectively treated as two separate properties. CGT on each will be calculated separately depending on the number of years let and number of years used as only or main residence. Final 3 years' ownership is treated as only or main residence where it has been your only or main residence at any time in your ownership.

Assuming you have not let the 1st floor before, there will be no CGT on this one.

The ground floor will have been used as your only or main residence and therefore will have the final 3 years exempted (inclusive of your actual stay in the last year or so). Additionally, you will also qualify for lettings relief against the chargeable gain by reference to the let period. There are also other reliefs, eg indexation allowance, taper relief and annual exemption to further reduce the chargeable gain.

No, I don't think you could be doing much else to mitigate any possible exposure to CGT.

Having said all this, I must confess that the actual calculations may be tricky and you should not rely only on the strength of this reply. It is best to seek professional advice if in any doubt.

Ramnik