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babnye

Cgt Rules

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Our twatty landlords kicked us out with minimum notice after 6 years in the property. It was rented out for 7 in total. They never lived there.

They gave some **** and bull story about both being posted abroad (they're in the army) but they needed the house as a base for their children and au pair.

The house is now on the market. They have painted it and put some crappy stuff in there.

What are the capital gains tax rules on selling a property after renting it for so long? They are clearly going to try and claim private residence relief. Is there a minimum period of residence?

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Our twatty landlords kicked us out with minimum notice after 6 years in the property. It was rented out for 7 in total. They never lived there.

They gave some **** and bull story about both being posted abroad (they're in the army) but they needed the house as a base for their children and au pair.

The house is now on the market. They have painted it and put some crappy stuff in there.

What are the capital gains tax rules on selling a property after renting it for so long? They are clearly going to try and claim private residence relief. Is there a minimum period of residence?

There is no minimum time you have to live in a property to claim, lettings relief but you have to be able to pusuade your tax man that you genuinely lived there as your main home. So it depends on circumstance, move in on Monday, unexpectedly lose your job on Tuesday and decide to rent it out to cover bills on Wednesday and you might be ok. In your LL's case I think much under a year would be looked at pretty suspiciusly.

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What are the capital gains tax rules on selling a property after renting it for so long? They are clearly going to try and claim private residence relief. Is there a minimum period of residence?

How is "it clear they are going to try and claim letting relief"?

With CGT at only (!) 18% it just doesn't seem worth the risk, espeically as - if they stay outside the UK for 5 years they won't even have to pay that

tim

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Our twatty landlords kicked us out with minimum notice after 6 years in the property. It was rented out for 7 in total. They never lived there.

They gave some **** and bull story about both being posted abroad (they're in the army) but they needed the house as a base for their children and au pair.

The house is now on the market. They have painted it and put some crappy stuff in there.

What are the capital gains tax rules on selling a property after renting it for so long? They are clearly going to try and claim private residence relief. Is there a minimum period of residence?

That sadly is the risk of renting, I am guessing you let the contract go periodic rather than sign up a new period every time the old one expired. Sadly the only way to provide at least some assurance of tenture is keep the tenancy under AST.

And it works both ways of course, if you suddenly wanted to leave, you can under a periodic tenancy and not under an AST

Also under the old GCT scheme you used to get more relief the longer you held the investment (taper relief) now with the flat rate it makes no difference

Edited by Matt Henson

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I trained as a tax consultant. The house will be liable to CGT unless they can show it's their principle private residence (clearly it isn't). There's a minimum time you can not use the house as your home and still get away with it but if my memory serves me correctly this is only 3 years.

I'm not aware of any special rules for people in the army but if you're argument is based on the fact that this is their only property then this is irrelevant. Even if you only own one property, if you don't live there then it's not your home hence is liable to CGT.

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I trained as a tax consultant. The house will be liable to CGT unless they can show it's their principle private residence (clearly it isn't). There's a minimum time you can not use the house as your home and still get away with it but if my memory serves me correctly this is only 3 years.

You're not very good then are you (based upon your own statement that you can't remember something this basic).

You will gain CGT relief for any time that it was your PPR and for the final three years if it was ever your PPR. There is no clawback of relief already obtained because at some point it ceases to be your PPR.

I'm not aware of any special rules for people in the army but if you're argument is based on the fact that this is their only property then this is irrelevant. Even if you only own one property, if you don't live there then it's not your home hence is liable to CGT.

If the person is posted overseas for the duration of ownership then they will not have to pay CGT under a different rule.

tim

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If they're in the army then their house (assuming it is their only one) is completely free of CGT.

Correct. Armed forces personnel essentially live tax free. For example, they are allowed to buy two cars a year tax free.

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You're not very good then are you (based upon your own statement that you can't remember something this basic).

You will gain CGT relief for any time that it was your PPR and for the final three years if it was ever your PPR. There is no clawback of relief already obtained because at some point it ceases to be your PPR.

]

Not sure why this offended you so much especially given that what I said about PPR and the 3 years rule was actually correct. I haven't actually been a tax consultant for years.

a. Learn to read

b. Get some manners

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Not sure why this offended you so much especially given that what I said about PPR and the 3 years rule was actually correct. I haven't actually been a tax consultant for years.

a. Learn to read

b. Get some manners

No. You claimed to be an expert and then spewed nonsense.

Do not hold yourself out as an expert when you are not.

People read this site and imagine that what is written here is true. Of couse there's lots of rubbish here. But you cannot guess at tax law - which is what you did - and hope to get the right answer; and in doing so you merely add to the rubbish on this site.

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No. You claimed to be an expert and then spewed nonsense.

Do not hold yourself out as an expert when you are not.

People read this site and imagine that what is written here is true. Of couse there's lots of rubbish here. But you cannot guess at tax law - which is what you did - and hope to get the right answer; and in doing so you merely add to the rubbish on this site.

Except what I wrote on the CGT rules was correct. I was quite clear that I wasn't aware of special rules for people in the army. Never pretended otherwise.

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Not sure why this offended you so much especially given that what I said about PPR and the 3 years rule was actually correct.

What you said about the three years rule was not correct (the only correct part about it was that something is special about three years, but what is special about them is completely different to your description)

Sorry if I offended you (I think I explained that your own description made me come to the conclusion that I did)

tim

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Except what I wrote on the CGT rules was correct.

No it wasn't

I was quite clear that I wasn't aware of special rules for people in the army. Never pretended otherwise.

Accepted (I don't know about this area either)

tim

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You're not very good then are you (based upon your own statement that you can't remember something this basic).

You will gain CGT relief for any time that it was your PPR and for the final three years if it was ever your PPR. There is no clawback of relief already obtained because at some point it ceases to be your PPR.

If the person is posted overseas for the duration of ownership then they will not have to pay CGT under a different rule.

tim

s.222-223 TCGA 1992, folks...

The PPR relief relating to employment away from home is for anybody, not just the armed forces, but in all cases it is dependent on the owner living in the property before and after the period of non-occupation.

This relief is not financially restricted (like lettings relief), but is limited to 4 years if the employment move is within the UK (unlimited if outside the UK).

There is a further 3 years' relief available without reason, but again it must relate to a period between two periods of actual occupancy.

On the basis of the facts as presented by the OP, as the owners have never lived in the property, they won't be entitled to any relief (without lying to HMRC, of course).

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There is a further 3 years' relief available without reason, but again it must relate to a period between two periods of actual occupancy.

Sorry, that's still incomplete

The relevent rule is:

"The final 36 months (3 years) that you own it will be treated as if you lived there, even if you didn't, as long as the property has been your only or main home at some time during the time that you owned it"

Copied directly from the revenue web site. Note that (legitimately) nominating it as your main home for (say) the final two weeks of ownership is enough to get three years of relief. This is what the MPs did.

tim

Edited by tim123

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s.222-223 TCGA 1992, folks...

The PPR relief relating to employment away from home is for anybody, not just the armed forces, but in all cases it is dependent on the owner living in the property before and after the period of non-occupation.

This relief is not financially restricted (like lettings relief), but is limited to 4 years if the employment move is within the UK (unlimited if outside the UK).

There is a further 3 years' relief available without reason, but again it must relate to a period between two periods of actual occupancy.

On the basis of the facts as presented by the OP, as the owners have never lived in the property, they won't be entitled to any relief (without lying to HMRC, of course).

Oh aren't you smug. But still wrong. Try re-reading TCGA 222 with a particular focus on (8).

And here it is in easy English. http://www.hmrc.gov.uk/manuals/cg4manual/CG64555.htm

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<!--quoteo(post=2169595:date=Sep 29 2009, 01:50 PM:name=schmunk)--><div class='quotetop'>QUOTE (schmunk @ Sep 29 2009, 01:50 PM) <a href="index.php?act=findpost&pid=2169595"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->s.222-223 TCGA 1992, folks...

The PPR relief relating to employment away from home is for anybody, not just the armed forces, but in all cases it is dependent on the owner living in the property before and after the period of non-occupation.

This relief is not financially restricted (like lettings relief), but is limited to 4 years if the employment move is within the UK (unlimited if outside the UK).

There is a further 3 years' relief available without reason, but again it must relate to a period between two periods of actual occupancy.

On the basis of the facts as presented by the OP, as the owners have never lived in the property, they won't be entitled to any relief (without lying to HMRC, of course).<!--QuoteEnd--></div><!--QuoteEEnd-->

Oh aren't you smug. But still wrong. Try re-reading TCGA 222 with a particular focus on (8).

And here it is in easy English. <a href="http://www.hmrc.gov.uk/manuals/cg4manual/CG64555.htm" target="_blank">http://www.hmrc.gov.uk/manuals/cg4manual/CG64555.htm</a>

Fair enough, I must admit I've never seen that one in practice - I only work with employees of companies, not public servants, and very rarely advise on CGT.

I quoted from memory, as I didn't have a copy of the legislation to hand.

There's no need for the aggressive tone, though.

Edited by schmunk

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