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Capital Gains Tax due when selling residential property that has been rented out

26/04/2019 14:59:45
I need advice on what capital gains tax I would have to pay if I sold a residential property that I have been rented out. I know that there are changes proposed in 2020 & need to make an assessment of it is worth it or not to keep renting the property out.
I only own 1 property.
I purchased and lived in this property as my main residence for 7 years and7 months before renting it out.
It has been rented out for 9 years and 2 months now.
If I was to sell this property how much capital gains tax would I owe?
Do I only pay capital gains for the % of the time that I have rented the house out? I.e. I would not be liable for the time that I actually lived in the house as my main residence?
What are the new rule for capital gains tax coming in in 2020 & how will they affect me?
Do you hold webinars on capital gains tax? I have looked online at the info on capital gains tax and it doesn't answer my questions above.
thanks
Kellie
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Re:Capital Gains Tax due when selling residential property that has been rented out

30/04/2019 08:45:19
Hi Kellie,

Thanks for your question.

HMRC will not estimate or calculate the Capital Gains Tax as it is all based on facts.

HMRC will guide you to all the information relating to selling a property that was at one time your main private residence and then a let property as you may be entitled to Private Residence Relief and Lettings Relief up to the 05/04/2020 as the rules will change from the 06/04/20.

Please refer to the following links:

Tax when you sell property

Tax when you sell your home

Capital Gains Tax

Private Residence Relief: HS283 Self Assessment helpsheet

Once you have calculated the Capital Gain for Private Residence Relief you will take the gain over the months that you have owned the property times the months that you have lived in the property plus the final 18 months of ownership.

For the Lettings Relief you will take the gain over the months that you have owned the property times the months the property was let out. The Lettings Relief is restricted to the lower of 3 figures, the letting gain, private residence relief calculated or £40,000.

To work out the taxable gain you will take the gain minus the PRR/Lettings Relief minus the annual exempt amount and this will confirm any gain subject to CG Tax. All this information is available in the HS283 helpsheet.

In respect of the new rules the only information that we hold is available on our website as the consultation will not be finalised until 01/06/19. The information regarding the change will be made available through our website in due course.

Please refer to the following links:

Private residence relief: Budget 2018 brief

Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs

I hope this helps.

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