Are teachers exempt from capital gains tax on their property if they rent it out whilst working as housestaff?

Question

My wife and I purchased a house in 2003 whilst working as a housemaster (and wife) in a boarding school. It has been necessary to live in school accomodation in order to discharge our duties, and therefore we rented out our house. It has gained about £50,000 in value over the past few years,and although we have never lived in the house we would now like to sell it. I believe that there are special dispensations relating to capital gains tax if you have to live in accomodation in order to do your job(i.e. a vicar for example) and therefore are unable to live in your own house. Under these circumstances the property is treated as your principle residence. Is this true? and,
1. Does this apply to Housemasters?
2.Are we able to claim the house as our principle private residence even if we have not lived in it?
3. If not then how long would I have to live in it to avoid paying capital gains tax?
Any insights into yhis problem would be very gratefully received. Thank you.

Answer 1

If you have been living in job related accommodation, then the sale of the property would not attract CGT, even if you never lived in it. You simply would not declare the sale.
Your employer would have to be ready to confirm that you were required to live on school premises should HMRC ever raise an enquiry into this aspect of your tax return.

Answer 2

I believe you will probably have to pay CGT on the profit,but if you go back and live in the house for 12 months that should solve your problem.Have no information about dispensation,sorry.

Answer 3

Fengirl has it spot on - you are safe from CGT.

The important point is that your employment requires you to live on the school premises. It is a good idea to check that your contract of employment states this. If not, then get something in writing now.

Answer 4

Sorry, I am not experienced in the tax laws of the United Kingdom. The best answer this old US citizen can give is to contact a tax professional, it appears your tax return will have other issues also.