House Sales and CGT...

[trio]

Hi sorry if this has been covered but i have seached back in Forum.

My flat (main residence, never rented) sells in 2 weeks. I moved out about 1 month ago to another house I own in the midlands.I bought this house back in about 1995 and It was my mums home till she died in 1997. I lived there full time for about a year caring for her and after her death. Since then its been empty, never rented. I have just received an offer on the house out of the blue and would like to sell but wonder if i should live there longer to avoid cgt liability? I will be back in residence for about 4 months by time its sold if i go through. Any thoughts would be appreciated. Great new site btw.

[cnrsoper]

you will be liable for CGT regardless of when you sell your mothers old house. You should consult a good accountant/tax advisor with far more details, like prices and the precise dates.

[Yardleystar]

Hi

CGT will be due I'm afraid, but from your remarks, it looks as if this can be greatly mitigated

[Tax Accountant]

Your flat has been your main residence and it is being sold. There will be no CGT on this as it has always been your main residence.

You now move to your other house which you bought in 1995 and which you lived in for a while to care for your mum and for sometime after she died in 1997. This period of residence will not be allowed if your flat was your main residence at that time because only one property can qualify as main residence at any one point in time. However, you have already made the house your main residence and if this is a fact which could not be disputed, it will give you exemption for the final 3 years of ownership. Therefore, 3 years out of 10 years ownership will be exempted. You will also get taper relief and annual exemption against the other 7 years gains. All gains are time-apportioned. If you also let the house at any time in your ownership, and also used the house as your only or main residence at some time in your ownership, you will also qualify for lettings relief of upto £40,000. If the house is owned by two persons, eg a couple, each person would be entitled to lettings relief of upto £40,000.