UK Tax

UK Tax Questions? Ask a UK Tax Advisor for answers ASAP

Ask an Expert,
Get an Answer ASAP!

UK Tax
This answer was rated:

I purchased my mothers house in Nov.2011.with the idea of

I purchased my mother's house...
I purchased my mother's house in Nov.2011.with the idea of living there at a later date. House has been empty since I purchased as I have my main residence where I have lived for 29yrs on the market. I plan to move to other house later this year whether or not I have sold my main residence. Where do I stand with CGT if my main residence is still not sold. Also where would I stand if I decided to let main residence while it is still on market. I pay Council Tax on both properties & if I hadn't sold main residence on moving & decided not to let I would continue to do this as I would probably return to property for the odd weekend. Please can you help as I am confused as to where I stand with CGT. Thank you.
Show More
Show Less
Ask Your Own UK Tax Question
Answered in 21 minutes by:
5/4/2013
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,048
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Verified

Hi

 

Thanks for your questions

 

 

Lets look at how things are, and whether there is scope to better them.

Your mothers house, will always have a capital gain implication for the year that it has stood empty, as things currently stand, due to the fact that you have a main residence during this period, in which you remained resident. But if you then take up residence there, then this will only be a concern, when and if you come to sell in the future, when that 12 months period will need taking into account.

 

Your current main residence, has (until now) been your main residence throughout, and so you have the time you lived there, plus a further 36 months after you move out, that will be covered under the private residence relief rules, so even if you have not yet sold your main residence, then there will only be a capital gain implication should it take more than the 36 months, from the date you leave this property. And this 36 months exemption applies, even if you let the property out.

But if you decide to keep it, then after this 36 months, then a capital gain position arises, which may be reduced if you decide to let it out to tenants, as a further relief called private lettings relief is due, which can allow up to a maximum of £40,000 exemption on any arising capital gain, and of course you have the annual exemption allowance - which currently allows a further £10,600 exemption in the year any gain arises.

If, however you chose to keep this current main residence, for weekend use, then just the private residence relief is considered, so if you hold onto this property beyond the 36 months, then a capital gain will arise.

If you let the current main residence, then this will require you to declare rental income to HMRC.

 

Now to look at whether this position can be bettered.

 

You do have the option to elect that your mothers home be treated as the main residence from the date of purchase, and as long as this election is made within 2 years of the purchase of your mothers home (so by Nov 2013) and this would mean that you clear yourself of any capital gain arising on your mothers property, as you plan to move here, however, this will really only be of benefit IF you sell your current main residence within 3 years from Nov 2011 (so by Nov 2014) because by making this election the current residence ceases to be physically the main residence from Nov 2011 ( as you can only have one elected main residence at the time)

And of course will have no benefit it you plan to keep your current main residence , for weekend visits (as then its just swings and roundabouts as there will still be a capital gain of the same position arising, its just a question of which property this additional year sits with)

 

So its really a case of reviewing the position nearer to the time that you make the move, and establishing your intentions at that time (as to whether there has been any interest in selling the property, or whether you plan to let the property out)

 

But if you need more advise at that time, with your actual intentions, you can always come back to Just Answer, and ask for me Sam Tax, if you would prefer (just ask for Sam Tax in your opening sentence)

 

If you have any follow up question, then please do ask, but if you ensure that you rate the level of service you have received, it would be appreciated, as this ensures I am paid for time and expertise. And any feedback and bonus are always welcomed.

 

Thanks

 

Sam

 

 

Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,048
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Verified
Sam and 87 other UK Tax Specialists are ready to help you
Ask your own question now
Ask Sam Your Own Question
Sam
Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 14,048
14,048 Satisfied Customers
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax

Sam is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Sam

Sam

Accountant

14,048 satisfied customers

26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax

bigduckontax

bigduckontax

Accountant

871 satisfied customers

FCCA FCMA CGMA ACIS

TEAP007

TEAP007

Tax Preparer

759 satisfied customers

Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years

Andrew Baker(baktax)

Andrew Baker(baktax)

Personal Tax Adviser

756 satisfied customers

35+ years experience in income tax, CGT, non-residence

berduchwal

berduchwal

Accountant

669 satisfied customers

Qualified accountant and bookkeeper running my own practice since 2008.

Clare

Clare

Solicitor

148 satisfied customers

25 years exeperience as a high street solcitor

Mrs-Tax

Mrs-Tax

Tax Adviser

59 satisfied customers

Law Degree, 19 years in UK Tax.

< Previous | Next >

Related UK Tax Questions
An individual Landlord who owns 6 properties has bought a
An individual Landlord who owns 6 properties has bought a laptop c£800 - can he claim Capital Allowances for it as he uses it to keep his records on and manage his 6 properties? Thanks CAS… read more
Sam
Sam
Accountant
14,048 satisfied customers
I am confused so I rang HMRC. Now I'm even more confused!!!.
Hi Sam, I am confused so I rang HMRC. Now I'm even more confused!!!. I am UK resident.I am currently employed PAYE. I have been offered a job by a UK based company, working on a RAF base in the Falkla… read more
Sam
Sam
Accountant
14,048 satisfied customers
I am self-employed in the UK, and I do contract work for a
Hi there. I am self-employed in the UK, and I do contract work for a company based in the USA. I get paid in dollars for that contracted work on a per-month basis, based on what work I do & days worke… read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
I have setup a partnership UTR with my wife (property
I have setup a partnership UTR with my wife (property management) treated as a Trading business . My turnover from rental income is just under £83,000. But if it did go above that would I have to regi… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I would like some advice on is on Capital Gains Tax, more
I would like some advice on is on Capital Gains Tax, more specifically, the 10% Entrepreneurs' Relief option. In May 2015, I sold part of my business, which was a website. The total sale value was $29… read more
Sam
Sam
Accountant
14,048 satisfied customers
I'm trying to figure out why my P60 doesn't account for the
I'm trying to figure out why my P60 doesn't account for the taxes paid when my RSU vest. It seems that they put the full amount of shares vested but they don't surface the almost 54% taxes already pai… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I've got an interest only buy to let mortgage for £112000 I
I've got an interest only buy to let mortgage for £112000 I was going to put £18000 down it ,which would reduce the monthly to about £220 per month .I currently get £595 per month rent .is it worth in… read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
I sold an investment in December 2017 for 100,000 GBP (net
I sold an investment in December 2017 for 100,000 GBP (net sales proceeds) . I bought the investment 15 years ago in 2002 for the total cost of 40,000 GBP I have been working overseas as an expatriate… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
My friend wants to buy annual leave from her work which then
Hi my friend wants to buy annual leave from her work which then is deducted through her wage over 12 months. Will buying annual leave affect her tax credit… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
I'm trying to fill in my Micro Entity accounts and it keeps
Hi I'm trying to fill in my Micro Entity accounts and it keeps coming up shareholders funds must equal net assets. Not really sure why can you help please? … read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
Regarding self assessment taxes. I'm a USA and UK citizen
Regarding self assessment taxes. I'm a USA and UK citizen and will need to file USA and UK (self assessment) tax returns. Both countries tax on worldwide income.In the USA I have a retirement account … read more
Sam
Sam
Accountant
14,048 satisfied customers
I am submitting my Micro HMRC accounts first year for
Hi there I am submitting my Micro HMRC accounts first year for company - if I sen you our balance sheet could I have you tell me what box information needs to be filled in. I would be willing to pay o… read more
taxadvisor.uk
taxadvisor.uk
Accountant and Tax Practitioner
Chartered Certified Accountant - FCCA
3,094 satisfied customers
I am the director of our non profit organisation and am not
Hi I am the director of our non profit organisation and am not getting paid at the current date due to raising funds however I put in a lot of hours per week can I claim working tax credits along with… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
A person has dual residence in England and Greece with
A person has dual residence in England and Greece with income in both countries. 1.Do both Incomes have to be declared in the UK? 2.Is there a form which needs to be completed to inform the HMRC in UK… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
In February 1999 I bought my first house. The listed price I
Hi – in February 1999 I bought my first house. The listed price I paid was £30,500 (paid between deposit and mortgage). In June of 2008 I married and in July of that year I quit my job and my wife and… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
My question regards taxation on earnings that I have been
My question regards ***** ***** earnings that I have been paid in Bitcoin.I am a sole trader working in the online marketing space, residing and paying tax in the UK.I have been providing marketing se… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
A couple of years ago my employer closed the office I worked
A couple of years ago my employer closed the office I worked at (which was located a few miles from my home) and asked me to instead work from home, travelling to their other UK office (about 100 mile… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
If I give money to a US LLC to trade cryrocurrenxies for me,
If I give money to a US LLC to trade cryrocurrenxies for me, how will I be taxed in the U.K.?… read more
bigduckontax
bigduckontax
Accountant
FCCA FCMA CGMA ACIS
871 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x