how long do I have to own a property in the uk before I have to pay capital gains tax when I sell it?

Answer 1

http://www.taxationweb.co.uk/propertytax/

If it is your primary residence, then £0 tax is liable.

If it is your second home, then see below ...

Capital Gains Tax -- Residential Property
The previous two articles on Capital Gains Tax give an overview of the general structure of the tax as it affects shares and similar investments in particular. This article looks at the effect on property, which has a host of special rules peculiar to this particular asset in addition to the fundamental principles of the tax.

Main Residence Exemption

The fact that a taxpayer's main residence is exempt from the tax is almost certainly the most widely known feature of CGT on property. But, as always with tax, although true, it is loaded with ifs and buts.

If more than one property is owned and available, i.e. not rented out, then the individual can elect for whichever they wish to be the main residence.

A married couple can have only one main residence exemption between them, so long as they are living together. So if you have a partner, and you each own an available property -- not rented out in full -- then you might, in the long run, be better off remaining unmarried if large gains are in prospect. Each person then remains in possession of a main residence. If you marry, then one of the properties will have to stop being a main residence and, upon disposal, may be subject to CGT, depending on the period of ownership and the amount of gain.

Note that spouses are defined as living together for this purpose unless they are separated under a court order or similar, or are separated in circumstances which render permanent separation likely.

Partial Periods of Main Residence

A property may only intermittently have been a main residence -- perhaps because it was occasionally rented out, or maybe the owner had another property that was elected as a main residence. In this instance, any gain on disposal must be apportioned on a time basis between the exempt main residence period and the taxable non-main residence period.

One of the special property CGT reliefs comes to our aid here, because apart from the factual period of main residence, the last 36 months of ownership is also treated as though it was main residence, even though it may not have been, typically because it was let. Here are some examples of this relief:

You buy a flat which is your only property, live in it for a year, then buy another property and move out whilst renting out the original flat. A common situation. Clearly, upon moving out it ceased to be your main residence. It is in a popular area of London and prices are rising rapidly. You continue to let it for three years, then decide prices are getting toppy. Since you are showing a very large gain, you sell. No CGT would be due at all because the final three years of ownership are treated as though they were exempt main residence.


Same again, except that the letting lasts for five years after you move out, then you sell. In this case the exempt period would be the first year because you were living there, plus the three years for the relief, compared with the total ownership of six years. So, upon selling, only part of the gain would become taxable. This would be calculated by multiplying the gain by 2/6 -- this being the two years ownership out of the total six that was not covered by the main residence exemption. See below for further relief for let properties available in some cases.
As with shares, in calculating the overall gain, indexation applies to gains made up to 5 April 1998, but only from March 1982 if the property was held before that date.

Note that if taper relief is available, which runs from 5 April 1998 although there is none for the first three years, then this is applied to the net gain after deducting any main residence exemption fraction, in this case to the 2/6 figure. Non-business asset taper relief applies to such a case.

Residential Let Property Exemption

Where a gain is made on disposal of a property that has been a main residence at some point, but has also specifically been let as residential accommodation, then a further special relief is available.

This exempts a gain of up to £40,000, or an amount equal to the exempt main residence fraction, whichever is the lower.

An example will illustrate this. Take the flat in the second situation above, where 2/6 of the gain became chargeable to CGT. Let's put some figures on it.

Cost: £100,000
Sale price: £200,000
Gain: £100,000
Period of ownership: 6 years
Exempt main residence period: 1 year of occupation plus 3 relief years
Total exempt amount of gain: 4/6 x 100,000 = £66,667
Taxable amount = £33,333

Now, the let property exemption gives further relief equal to the amount of the exempt gain, here £66,667, or a maximum of £40,000 whichever is the lower. In this case the £40,000 is the lower but since this is greater than £33,333 no tax is payable.

This relief applies also to the situation where a person continuously occupied part of the property as their main residence but also let part of it during that time.

Note that this relief is available only where the property was at some point the main residence. If it never was, then it is not applicable at all and CGT applies in full to any gain subject only to the general reliefs such as indexation, taper relief and the annual exemption.

Other Exemptions

Job Related Accommodation
Where a person owns a property, but is not living there and is resident in some other property which he does not own, required by the duties of employment, then the property owned is deemed to be a main residence and is thus exempt from any gain on disposal. There are some conditions attached to this, as it's not any old job-related property which provides exemption of another owned property.

Periods of Absence
In certain situations, a property that is an exempt main residence will continue to be so even where it ceases to be the main residence, when the owner has no other exempt main residence. Broadly these are:

Any periods of absence not exceeding three years in total.
Any period of absence where the owner worked in employment overseas and all duties were performed abroad.
Any period of absence up to four years, or periods not exceeding this period in total, during which the person was prevented from living in the property because his employment or self-employment conditions required him to live elsewhere for the effective performance of the duties.
Note that it is a condition of these points that the property was the main residence both before and after the periods of absence.

And that is it for a brief and very simplified look at the CGT reliefs available on residential property. There are a number of special rules that apply to special circumstances such as agricultural residential property and a few other situations, but we won't go into them here.

Tax rates can be found here.

Answer 2

If you live in it (continuously) as your main or only home, then you will never be liable for CGT. If it is not your home then I believe that you will be potentially liable for CGT (depending on the gain) regardless of how long you own it. See the HMRC website for more information.

By the way the £250k threshold mentioned above is incorrect. What's important for CGT is the amount of the gain, not the absolute value of the property, and the threshold is currently £8,500.

Answer 3

Not Sure Seven Years, That May Be Gift Tax

Answer 4

Capital gains tax and inheritance tax are both only payable on houses over £250,000, regardless of how long your ownership has been.

Answer 5

There is no cgt to pay on your principal home in the UK. Cgt only kicks in on homes as investments and the inland revenue sees all homes apart from your principal residence as investments.

Answer 6

all depends on how long or whether or not u lived in it
if its ur principal home then u wont pay capital gains on it

Answer 7

if it is your own property, which you live, then you wont, but if for business u will have to pay no matter the length of time

Answer 8

i think it is 2yrs.