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CGT Military Exemption

How much CGT will we have to pay when we sell?

My husband (member of the Armed Forces) and I bought a house in 2009 before we were married.  We originally intended to live in the house but my OH's postings have not allowed us to do so.  We moved into SFA when we got married.  Prior to this OH was in military accomodation.

Up until the time when we had our first child, it was intent to live in the property, the only factor preventing us from doing so was the location of OH's posting.  We have since had another child and so the house is now too small for us as a family. 

As such, we have never lived in the property but instead have rented it out since it was purchased. 

We have now decided to sell and buy a house that we can actually live in (similar area to currently owned house).  Based on the expected sale price, we will have made a capital gain in the region of £125k and believe that we can claim relief as we were never able to live in the property owing to OH needing to be in a different location.  Is this correct and what exemption does this fall under?  I also believe that we will need to illustrate that we intended to live in the house.  How can this be achieved?  

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06th Dec 2018 12:15

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Based on the expected sale price, we will have made a capital gain in the region of £125k ....

How about you spend a tiny fraction of the £125,000 gain on some professional advice? Just a thought.

Alternatively, try the free forums on the Martin Lewis site.

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06th Dec 2018 15:46

I don't know the answer to your question but I feel quite strongly that you shouldn't qualify for PPR for a period in which you were renting out the property.

Your husband's deployment was not the only reason you didn't live there, the other people living there at the time would also be a fairly compelling reason why you couldn't live there.

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to Duggimon
06th Dec 2018 15:57

You can feel away Duggimon, but I have found feelings don't change tax rules.

The OP needs to take proper tax advice, suggest you approach a specialist in BTL as its a tricky little area to get right and lots of accountants seem to get these things wrong.

It ought to cost less than £35,000.

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to ireallyshouldknowthisbut
06th Dec 2018 16:12

I should have stated I agree wholeheartedly with the first response advising just that!

My response was just my answer based on the amount of research the OP had paid for. I also feel quite strongly that my feelings ought to have more of an impact on tax legislation.

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to Duggimon
06th Dec 2018 16:28

You are thinking back to front. Absence whilst serving HMG is not a result of letting; letting is an option whilst you are serving.

That said, it's a capital taxes question and I wouldn't be asking it of a BTL specialist.

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to ms998
07th Dec 2018 11:55

Unfortunately not, as the property was never the individuals PPR, s.222 TCGA is not on point. Edit: however, s222(8) may save you.

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By MJShone
07th Dec 2018 11:29

Your starting point is s222(8) of the Taxation of Chargeable Gains Act 1992. Se HMRC Capital Gains Tax Manual at CG64555. See also here: https://www.gov.uk/government/publications/private-residence-relief-hs28...
You might then need to look at other provision if you have "gaps" in your ownership period that aren't covered by the job-related exemption. (Assuming it applies!)

You would probably be well advised to ask someone who knows this area of tax to help with this.

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to MJShone
07th Dec 2018 11:50

Quote:

You would probably be well advised to ask someone who knows this area of tax to help with this.

As has already been said. The question is how to find a capital taxes advisor (you want one of them, not a BTL specialist, as I noted above). But… this is a well-trodden road for service personnel [and HMRC is similarly well-versed at enquiring into these claims by service personnel]. I can’t imagine it’s that difficult for the OP to find a suitably qualified advisor.

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