# House selling tax.



## johnnyc (Nov 18, 2008)

Just a quick one i've tried googling but got no straight answer.

My girlfriend owns her own flat.

If we get a joint mortgage together and she keeps her flat to rent. 

When it comes to her selling the flat, say a year later will she have to pay tax. (The property value of the flat has risen since purchase)

The joint mortage will be my first house

cheers


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## Nanoman (Jan 17, 2009)

I suspect capital gains tax will apply.

Read more here... http://www.hmrc.gov.uk/cgt/property/basics.htm

I reckon a valuation for the property at the time it stops being the main residence and a valuation when you sell it a year later... tax on the difference. Just get some proper advice in case there's a silly rule that if you rent it out you pay tax on the difference between when it was first purchased or something.


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## Rayner (Aug 16, 2012)

Capital gains tax only applies if you're doing it to make money. 

If she rents it she will pay tax on the rent but she won't have to pay CGT when she sells it IF she stops renting it and lives in it or you both live in it for a short while. The time isn't important as you could move for 10000's of reasons other than money.

People always say you've got to live in a house for 6 months, a year etc but that's not true, in the past people have bought houses, started working on them to personal tastes then a loved one falls ill and needs looking after so they have to move to help them. They don't need to pay CGT. 

Some people move in and hate there neighbours after a few months so move, they don't pay CGT. 

If she/you want to make money out of property then you do have to pay tax, well either that or prison 


Does this make sense? It does in my head :lol:


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## Nanoman (Jan 17, 2009)

rayner said:


> If she rents it she will pay tax on the rent but she won't have to pay CGT when she sells it IF she stops renting it and lives in it or you both live in it for a short while. The time isn't important as you could move for 10000's of reasons other than money.


I'm very close to someone that has paid several tens of thousands of pounds in CGT in the last 2 years selling 3 flats... He was advised by a tax 'expert' that your idea wouldn't work. Tax was due on increase in property value while it was rented as well as rental income.

As per HMRC link I sent you don't pay CGT on your 'main residence'.


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## fatdazza (Dec 29, 2010)

Lots of misinformation flying about here, see a tax expert (or if you are financially savvy look up the rules on the HMRC website.)


It is long and complex but basically:

You are allowed one main residence and on this you pay no CGT.

You can rent out this residence (any rental income will be assessed for income tax after allowable expenses) and providing you have lived there at some time in the past, any CGT will only be payable on the gain during the period you were renting it out. You are "allowed" to add an extra 3 years to the time you lived there when calculating the gain. So basically you could rent it out for 3 years and pay no CGT. Finally there is an "allowance" of £11,000 each year (cannot be carried forward) for capital gains on which you will pay no CGT.


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## Andyg_TSi (Sep 6, 2013)

This link is also worth a read concerning private residence relief.

http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm


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## Rayner (Aug 16, 2012)

Whoops, missed the 'joint mortgage together' bit, I thought she was moving in with you but didn't realise her name was going to be on the mortgage.

Ignore my post lol


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