My sister and I purchased a flat on 21 April 2005 and sold it earlier this year on 09 February 2007.
During this time she was living in the property with her husband and two children.
I was also living in the property but not for the complete period of time.
When I moved out I moved into a sharehouse where I was paying rent to a landlord.
We split the mortgage payment 50/50 and we never made a rental income from the property.
Due to my not living on the property for the full period of time I am concerned that I will have to pay CGT.
Please can someone enlighten me as to my situation and point me in the right direction?
2007-09-21 01:39:28 · 5 answers · asked by Ryan F 1 in Business & Finance ➔ Taxes ➔ United Kingdom
You don't get taxed if you sell your "only or main residence".
As with most tax law it can get complex, but in a nutshell: did you OWN another property which you lived in? If you did, see an accountant and ask him to help you make an election to treat this flat as your main residence. This is just to make sure that everything works the way you want it to work (and it shouldn't affect your tax position on sale of the other property due to the period of time involved being less than three years).
Once a property IS your "main residence" there are all sorts of rules about how to work out how much of the gain is taxable according to how long you lived there blah blah. All you need to know about this though is that the last three years of ownership don't count when you're looking at whether some of the gain might be taxable. And you didn't even own it for three years in total!
So... as long as it can be treated as your "only or main residence" then you won't pay tax on any of the gain even if you weren't living there the whole time.
I don't think you have to declare it on your tax return either - which means that if you don't currently receive a tax return to fill in then you don't have to phone and ask for one or anything. Which is nice. Tax returns can be a pain, even if they're simple, if you're not used to doing them.
2007-09-26 06:06:28 · answer #1 · answered by Snakey B 4 · 0⤊ 0⤋
So long as it was your Principle Private Residence for at least some of the time, you get the last 2 years of ownership 'free' for CGT ..
Since you both lived in it for at last some time, and it was sold within 2 years, there is no CGT tax to pay by either of you.
NB> Your Solicitor would have worked this out when the flat was sold (you don't think Inland Revenue wait for people to 'confess' they owe CGT do you ??)
2007-09-21 09:33:15 · answer #2 · answered by Steve B 7 · 1⤊ 1⤋
You are not liable to capitals gains tax on selling a property that is your main residence. As you were living in the property for most (if not all) of the time, you should (but check) be able to say that it was your main home.
After all, it's not as if you had two houses.
I think you should be ok.
2007-09-21 09:36:00 · answer #3 · answered by skiparoouk 3 · 0⤊ 0⤋
Was it your sole main residence?
If it was, then there is no CGT due.
If you had other property and hadn't nominated it as your SMR then there may be a CGT liability.
See an accountant.
2007-09-23 16:38:27 · answer #4 · answered by Do not trust low score answerers 7 · 0⤊ 0⤋
since you own half, you should have gotten half the profit (and cash, so it will only be a percentage of that equity and you should have the cash to pay it
2007-09-21 08:48:57 · answer #5 · answered by Anonymous · 0⤊ 0⤋