Am I liable for tax?

I have recently (in last week or so) moved homes and kept the original home planning to convert it to an investment property.
We don't have tenants in there yet and am wondering if we sold (the property that was to be the investment property) now would it be classed as an investment property and taxed as such or is there a way we wouldn't have to pay tax on it (because it was our home and no tenants have lived there).
By the way, if we would have to pay tax is it Cap Gains Tax at 20% (on the difference between the mortgage and the sales price) that we would have to pay?

Would appreciate any advice.

You can only have one PPR ( Principal Private Res), However the revenue give one years grace to shift between properties i.e you can have 2 houses and not be liable to cgt on the sale of your previous home. This is assuming you don't rent it out for the period.

Mortgage is irrelevent your sale proceeds minus expenses incurred in selling less your origional cost multiplied by 20% is CGT liability.

After you move out of your PPR (principal private resident) it continue to qualify for PPR relief exemp from CGT for 12 months. So if you sell now no CGT.
If CGT were to apply it would be on the difference in sale and purchase price less a deduction for costs,period it was your PPR and then taxed at 20%

...also you can rent in the meantime and still not have to pay CGT if you sell within these 12 months

Thanks guys.
So I can hold on to it for 12 months and even have it rented out for that period and still sell within those 12 months and not incur CGT?

bacchus said:

...also you can rent in the meantime and still not have to pay CGT if you sell within these 12 months

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If you rent out your PPR within the first five years of ownership (except under the rent a room scheme - which you wouldn't qualify for as it won't be your PPR) then you will be liable for a Stamp Duty clawback (the stamp duty you would have paid as an investor at the time you bought the house) and to pay CGT when you sell.

You may not rent out the house without tax implications for the final year if you have not owned the house for more than five years.

There is lots of information around AAM on stamp duty, renting and converting a PPR to an investment property. Do a search and you'll find as much information as you care to read.

jim100 said:

Thanks guys.
So I can hold on to it for 12 months and even have it rented out for that period and still sell within those 12 months and not incur CGT?

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yes, if you have owned it for more than 5 years as clearly pointed out by Satanta