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Answered in 10 minutes by:
2/13/2012
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 16,712
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
VerifiedHi.
You are too late to nominate the property as your main residence. That could only be done within two years of your acquiring the property from your mother ten tears ago.
The gain on the sale of a property is treated as having accrued evenly over the entire period of ownership which makes calculating the taxable and non-taxable parts fairly easy.
The gain for the period a property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. So, in theory, you could move in for a year and get three years of the total period of ownership as tax free. However, the tax office may challenge your motives for moving into the property if you sell after just a year of living there and try to disallow exemption for the final three years of ownership especially if you moved back to your original home. In addition, most of the gain would still be taxable in any event.
Let me know if you have any further queries.
You are too late to nominate the property as your main residence. That could only be done within two years of your acquiring the property from your mother ten tears ago.
The gain on the sale of a property is treated as having accrued evenly over the entire period of ownership which makes calculating the taxable and non-taxable parts fairly easy.
The gain for the period a property was your main home is exempt from CGT as is the gain for the last 36 months of ownership. So, in theory, you could move in for a year and get three years of the total period of ownership as tax free. However, the tax office may challenge your motives for moving into the property if you sell after just a year of living there and try to disallow exemption for the final three years of ownership especially if you moved back to your original home. In addition, most of the gain would still be taxable in any event.
Let me know if you have any further queries.
Assuming the house you have been living in has been your main home since you bought it, if you give it away to your son, the gain will be tax free under the main residence rules. However, you would still need to live for seven years after giving it away for it to be free of Inheritance Tax.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 16,712
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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