Private Residence Relief

[1]

I've owned my property for 8 years and have lived with my girlfriend for the last 18mths. My place has been empty most of the time but I'm thinking of letting it for a year before I sell.

How will this effect any capital gains tax relief when I sell?

I understand its based on the amount of time rented vs time lived in. So am I right in thinking if I lived there 8 years and rented it for 1 then I would have to pay tax on 12mths/108mths = 11% of any capital gains, If I chose to rent it out for a year?

I've read that you get relief for the last 36mths regardless but dont understand how this works. Also not sure how letting relief works. Can anyone enlighten me?

[Eric Mc]

Yes, hire an accountant

You have the main basics covered in what you are saying.

[1]

Thanks Eric. Not sure I need an accountant as it simply isnt economic to rent the place now.

So whats the deal with the last 36 mths, if I let it for 12mths would I have to pay CG or not?

[Eric Mc]

CGT is not based on the property being let.
It's based on the property not being your main residence.

The important date to consider is not the date you started renting teh property out, it's the date you acquired a new main residence.

And yes, HMRC gives you an additional 3 years to add on to your period of "Main Residence" when working out the chargeable gain.

[sumo69]

So long as this property has remained your PPR, then so long as contracts are exchanged on the sale within 36 months of you moving out,you will have no CGT to pay on any profit arising even if its rented in that final period.

However, if you also own the new property that you are living in now then you wont have the PPR exemption for this initial period until property 1 is sold.

This may not be the optimal position, but cannot advise further given the facts known.

David