Discuss Capital Gains Tax in Finance on The Army Rumour Service; My wife and I each own a property on the same street in Wales, bought before we were married. We are now expats in UAE with 3 kids and would like to sell one of ...
My wife and I each own a property on the same street in Wales, bought before we were married. We are now expats in UAE with 3 kids and would like to sell one of the properties to fund a property outside UK. I would be grateful to learn if there is any way to reduce the amount of CGT we would be liable for on sale of my wifes property. Both are currently let out to cover bills etc
I have always been under the impression that, as long as you have lived in a property at some point capital gains tax does not apply. You bought it as a home not a business venture. But I second the above advice to speak to a pro.
You must be resident in the property you dispose of to avoid CGT but you can also claim that you vacated the property to make for an easier sale. However you just flip (like MPs do!), you make the residence you're selling your main residence and Bob's yer Uncle but I'm no lawyer so you'd have to get it verified but that is certainly how it used to be.
You can get some relief on a capital gain on a property proportionate to the period that it was your main residence. IF it ever was. Don't tell fibs they will catch you.
If you have all the bills for improvements made since the original purchase or take pver of ownership such as new roof, conservatory, central heating etc then they can be deducted from the profit before CGT
Also if it was in joint names then you both get to use your tax allowances against your individual gains. Assuming you are both ex pat with no other UK income that should help. However if you are getting rents then that comes under Schedule A and your allowances are already eaten into if not consumed entirely.
PBUH - yes it was my genuinely wifes main residence before we were married; improvements were funded by European money as part of a street by street improvement schemd through Penarth / S Glamorgan Councils - this is all documented. Unfortunately property in my wifes name only so that will limit offset - we plan to keep second house (in my name) as bolt hole if all goes wrong in UAE or children need to return to UK for schooling in the future