Make sure you tell HMRC which of your properties should be treated as your main home for tax purposes when you buy a second (or even third) home
The property that has always been your main home is free of capital gains tax (CGT). Any other property where you have lived for part of the time will attract a tax exemption for the periods you have lived there and have elected for it to be your main home. If a property has been your nominated main home at any time, the gain for the last 18 months of ownership (36 months if moving into care) is free of tax, even if you do not live there during that final period. Note that the position can be somewhat more complicated if an overseas property is involved.
Disclaimer
Tax tip supplied by Tax Briefs. Your tax situation will depend on your personal circumstances and we recommend you obtain independent tax advice. Any tax information is based on our understanding of current and proposed legislation and practice. The legislation and practice may be subject to change.
Related posts
Beyond ‘active’ and ‘index’ investing
Describing an investment as ‘active’ or ‘passive’ doesn’t fully explain how your investment manager...
Which is better, an ISA or a Pension?
ISA or pension - which is better? What a question. The answer to this will depend on you, but as the...
How will the 2018 Budget affect me?
While we wait to understand how Brexit will affect us, there are a number of changes coming this yea...
Have you had a letter from HMRC?
New rules mean that 95% of taxpayers should no longer need to pay tax on their savings income. But t...
Why do most people have no life insurance or critical illness cover?
78% of adults would 'rather be safe than sorry' when it comes to their finances. Yet 65% have no lif...
How online portals are driving up engagement in employee benefits
Recent research found that employee engagement and productivity is HR leader's primary concerns. Cou...
No such thing as a ‘no risk’ pension
When looking at options for funding your retirement, it’s important to understand that your pension...
Equity release in retirement; supplementing your pension with your property
When nearing retirement we face the challenge of ensuring our funds will last. Increasing numbers of...
How to track down a lost pension or investment
It's now common for people to have multiple pensions. How can you find details of lost pensions or i...
The financial planning requirements of James Bond, Harry Potter and Doctor Who
We take a look at the finances of three fictional heroes from the UK and discuss how financial plann...