If say, you bought a cheap property, did it up, and sold it on at a profit, but used it for the period as your main residence. Are you liable for CGT on the profit? say the length of ownership you are looking at is 6 month intervals up to 2 years?
Been looking at a few sites on the law, but all seems a bit vague, would you qualify for the tax relief if the above was the intention?
Nope.
No CGT on your main residence.
why isn't the government site that clear? 
You are an MP and ICMFP
btw not that I doubt you, but can any one else jump in and confirm this is the case, even after 6 months of ownership?
scotroutes - Member
You are an MP and ICMFP
what did you just call me? 🙂
In reading your post my thoughts, before i read br's post, was exactly what br says.
🙂
Weren't MPs doing this frequently in order to avoid CGT
b r - Member
Nope.No CGT on your main residence.
That's not always the case and doesn't apply in the case of developments/redevelopments.
See here: [url= http://www.hmrc.gov.uk/helpsheets/hs283.pdf ]http://www.hmrc.gov.uk/helpsheets/hs283.pdf[/url]
&. [url= http://www.wealthprotectionreport.co.uk/public/199.cfm ]http://www.wealthprotectionreport.co.uk/public/199.cfm[/url]
Why do you think you might have to pay CGT? People buy and sell houses all the time....
http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm
Mainly because on the link above it's says "The main reason you bought the property was to make a quick profit from the sale", under the restrictions bit.
I'm basically wondering if there's if a definate length of time "a quick profit" applies to?
To put this all in context, it wouldn't be a one off, forulating plans to buy cheap/run down, quickly do up to vaguely liveable, then live in a place for a short period, do up properly, then sell on, as trades etc are a dawdle(the experience is there), so all cost price, well apart from time and effort.
even if the worst came to worst and the profits didn't turn out that high i reckon the worst you would be would be living rent free for a while.. all abot property choice obviously..
Not CGT, but Income tax will be due on this scenario, as your intent was to make a profit. That makes it more likely to be correctly interpreted as a trade and therefore liable to income tax. Which is a bit more taxing than CG. Look carefully at the 'Badges of Trade', where even a single transaction such as a property development with intent to make a profit can indeed be seen to be a trade.
interesting, cheers highlandman, I'll look into that.
http://uk.accaglobal.com/uk/members/technical/advice_support/tax/income_tax/2011/badgesoftrade
I think the very last case here "taylor v good" backs up your point highland man. Still doesn't give an indication of length of time before it goes from being a trade to being an investment... More digging still required.
If you move in, which you plan to, it is pretty much inconceivable that you will be treated as trading and any gain will be exempt under the Principal Private Residence exemption.
Mefty has it.
Cheers all.