capital gains

sorry if this issue alredy addressed... but in a bit of a dilema

My partner bought house about 5 years ago and some time later was moved with work to a differnt county where he bought a small apartment B some time later. spent the time evenly between property A and B. 2 years later has been told he would be soon moving back to work in a location near to house A.

on this news apartment B was sold. saw a bigger house for both to move to and settle down which is house C. We used the profit(All of it) from apartment B to pay stamp, and sold house A to help purchace.

My head is spinning i dont know where we stand with capital gains... and more to the point cannot afford it !!!!!! does anyone have any idea so i might sleep tonight!

What you used the money for is irrelevant to the CGT issue. You probably need professional advice as the CGT situation here is not clear from my reading of the situation (e.g. which or property A or B was the individual's PPR for the relevant period - can't have been both, was either property ever rented out and if so when etc.). I would expect that there could be some CGT liability on either A or B or both. If property A was ever rented out within the 5 years of ownership then a clawback of stamp duty is most likely outstanding and there could also be issue with claiming owner occupier mortgage interest tax relief when not entitled to it.

house A was principal residence neither ever rented out. apartment was only small so never rented. the reson i mentioned the stamp was to illustrate there is nothing to pay cgt with. feels a bit unfair really

A was always your PPR so no CGT

Normal CGT due on profit made on B

You can deduct expenses in buying and selling (solicitor and auctioneers expenses) and afaia stamp duty on the purchase of property B

capall said:

A was always your PPR so no CGT

Normal CGT due on profit made on B

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Not necessarily.

You can only have one PPR, but that can change and if you have two residences available to you, you are meant to elect which one is you PPR. If B was the OP's partner's PPR during the period of ownership, then there will be no gain on that.

In these circumstances, only 1/5 of the gain on property A will be subject to tax (1/5 being the number of years the property was not the PPR less the last 12 months of ownership).

However, depending on the figures involved, it might make more sense to say that A was the PPR for the entire 5 years and so all of the gain on B would be taxed but none of the gain on A.

Look at the figures, then talk to an accountant.

I agree. It's far from clear that house A was always a PPR since the person lived abroad for a period. Professional advice is in order in my opinion.

ClubMan said:

I agree. It's far from clear that house A was always a PPR since the person lived abroad for a period. Professional advice is in order in my opinion.

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hi, you may have mis read the OP. never lived in another counrty( I wish!).. only county... A was always kept as the PPR most of the time was spent there. I could forsee this capital gains issue arising and wanted to keep it to the property of least value and profit. i hope this was wise!

Sorry - I did read it as "country"!

If property A was genuinely the person's PPR all of the time (in spite of some time spend in property B) then no CGT applies to A but CGT is an issue for B. If both A and B were PPRs but at different times (since you can only have one at any time) then CGT (on some portion of any resale gains) may be an issue for both properties. One way or another there could well be an outstanding CGT liability unless costs and exemptions render the liabilty as zero. I still stick by my comments about getting professional advice.

am getting an accountant to process it, but i felt i should be somewhat informed as well. i appricate all your help folks!