Letting your house and CGT

As you suggested, you are entitled to Only or Main Residence relief (OMR) on the sale of your house. In your case, the OMR will be restricted because you did not occupy it for the entire time of ownership. The last three years are counted as occupation, plus you lived in it for two years. This means your OMR will be restricted to 5/7ths of the gain.

However, you are also able to claim letting relief (assuming it was residential letting) and the amount you can claim if the lower of :

1. £40,000
2. The OMR relief due
3. The amount of the chargeable gain that is attributable to the period of letting, i.e. in your case, your gain after the OMR

Depending on the values involved, this may well wipe your gain out entirely.

Capital Gains Tax is a complex area so please feel free to seek professional advice from your local TaxAssist Accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.