Changes to CGT on sale of house

[Temp]

Reminder..

 

Currently if you move house you have 18 months to sell the old one before it starts attracting CGT. This is reducing to 9 months in April. In addition if you have to pay CGT you will only have 30 days after the sale to pay it ! 

 

If you sell after nine months (eg after 12 months) it's not just the gain in the extra 3 months you have to worry about. The calculation is more complicated.

 

 

[ProDave]

The calculation is actually quite simple (I looked into this when the change was announced because eventually we will be caught by the new rules.

 

They take your purchase price and the sale price and draw a straight line and assume the gain is linear throughout the period of ownership, so no arguing "but the market was flat during that period"

 

So any gain made while it is your private residence, and for 9 months after, is CGT free.  Only the gain made after that until it is sold attracts CGT.  then once the CGT is calculated remember you then have your personal CGT for that year to use up first (assuming no other capital gain in that year) and if jointly owned that's two personal CGT allowances to use up.

 

I didn't know it had to be paid within 30 days.  Previously you did not even declare it until the end of the tax year, and then had until the end of the following January to pay it,.

 

Anther change is the abolition of Letting relief.  That was a more complicated calculation that in most cases meant if you let a property that had previously been your main residence (i.e the situation we are in) then lettings relief would have reduce the CGT to nil.  That is no longer the case.