Capital Gains Tax on houses

Discussion in 'Army Pay, Claims & JPA' started by bluebells, Jan 10, 2007.

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  1. Hope someone can help with this one. A colleague of mine is about to sell his house which he bought in 1999 and has rented out since then because he has lived in MQs. It is the only property that he owns. Will he be subject to Capital Gains Tax? Having looked on the HM Revenue website it seams to indicate that you must have used it as your home to be exempt from Capital Gains.
  2. If it is your mate's only residence, then it is exempt CGT, even if he is not actually living in it....
  3. Depends on whether he can state it is his main residence or not - if he has made income on renting it out (which is the whole point) he will have declared that on his tax return, and therefore will have implied its not his main residence.
    Then he will get stiffed on tax.

    I should imagine that if he can prove he has lived there for a while, whilst not on exercise / stationed overseas, then he wont have a problem.
    If they go after him for money, then would suggest playing the political card of 'i havent lived there, as ive been overseas, fighting/counting boxes/drinking germany dry'.
  4. He can claim relief for any periods that he WAS living there.

    Better still, if he outs the tenants, moves in and makes it his residence for a week, I believe he can get clear of the whole amount.

    Whichever is the main residence at the time of sale is the one that is exempt.

    Also, he doesn't have to be living there to declare it to be his main residence, though he can't have tenants.

    Another thing is, if he has a wife, then he gets double the relief, or that may be if he changes the deeds to show that they are joint owners or owners in part or something..

    You'll need to look it up some more.
  5. As it is his only property any solicitor worth his salt will tell him how to avoid CGT, and as he will need one for the house sale he might as well ask the questions.
  6. Thanks for the advice. I think a solicitor could be the way ahead.
  7. Your question states that "he has lived in MQs"; hence, his house was "purchased as his primary residence with the intention of living in it when he retired from the Services".

    And that is all he needs to say. The Revenue website will deal with the whole of the UK - not the Services. If his solicitor suggests paying CGT is required, change the solicitor!

  8. I am in the same situ, we purchased our house and lived in it for a short while and then posted away, we informed the tax man that it was our main residence and that we intend to return once service life is over. We have not lived in it for 12 years and have rented it out since then. Each year we pay the tax due on it for rental income and once we decide to return to the uk, once the old girl has done her time ,we will sell it, the point is that CGT will not be imposed as we informed the taxman that we intended to return to it, all we have to do is say, its now to small for our needs and buy another one which we intend to do thus avoiding any CGT. The main thing is that you had to have lived in it before renting it out. Not only that but if you purchased the house and lived in it at your current posting and then were posted away you can claim back off the services each time you have a new tenant to cover the sign up agreement etc ( this is if you have a letting company doing this for you)