Selling House ... Capital Gains Tax?

[Ikemi]

Essentially, we're looking to sell our place and move into a flat owned by my parents ... Aside from cheaper living costs, it also gives us ample time to move out, clean our existing place, sell it, and then find a larger home elsewhere as cash buyers. As our existing place has increased dramatically in price, we should have a nice deposit ready for the next house. However am I liable to be charged capital gains tax on the amount? It's a consideration that a work colleague raised with me.

If this is the case, how would you invest the cash in order to circumvent capital gains? Do we need to buy a new property within 6 months of selling? We're planning to stay in the new flat for around 2 years. Alternatively, I jokingly said we could invest some of the money in a Ferrari F430 ... and the other half said, "If it doesn't lose value, why not?!". Probably a bad idea though ... yeah?

[UpTheIron]

Ikemi said:

Essentially, we're looking to sell our place and move into a flat owned by my parents ... Aside from cheaper living costs, it also gives us ample time to move out, clean our existing place, sell it, and then find a larger home elsewhere as cash buyers. As our existing place has increased dramatically in price, we should have a nice deposit ready for the next house. However am I liable to be charged capital gains tax on the amount? It's a consideration that a work colleague raised with me.

If this is the case, how would you invest the cash in order to circumvent capital gains? Do we need to buy a new property within 6 months of selling? We're planning to stay in the new flat for around 2 years. Alternatively, I jokingly said we could invest some of the money in a Ferrari F430 ... and the other half said, "If it doesn't lose value, why not?!". Probably a bad idea though ... yeah?

Assuming it was your PPR, then no liability.

https://www.gov.uk/tax-sell-home/private-residence...

[boyse7en]

If it is your home residence then there is no CGT liability

If it is a second home/rental property then CGT will be due. I'm pretty certain you can't avoid paying CGT by simply spending the money on a car, although if this is possible then I'm all ears

[Ikemi]

UpTheIron said:

Ikemi said:

Essentially, we're looking to sell our place and move into a flat owned by my parents ... Aside from cheaper living costs, it also gives us ample time to move out, clean our existing place, sell it, and then find a larger home elsewhere as cash buyers. As our existing place has increased dramatically in price, we should have a nice deposit ready for the next house. However am I liable to be charged capital gains tax on the amount? It's a consideration that a work colleague raised with me.

If this is the case, how would you invest the cash in order to circumvent capital gains? Do we need to buy a new property within 6 months of selling? We're planning to stay in the new flat for around 2 years. Alternatively, I jokingly said we could invest some of the money in a Ferrari F430 ... and the other half said, "If it doesn't lose value, why not?!". Probably a bad idea though ... yeah?

Assuming it was your PPR, then no liability.

https://www.gov.uk/tax-sell-home/private-residence...

Thanks for confirming, UpTheIron! I've read through the bullet points and it's a certainty that I will not need to pay capital gains ... The question now is, how best to invest the cash for 2 years? Any suggestions welcome! That said, I'll probably speak to a Financial Advisor in time.

Cheers!

[DeepFriedMarsBar]

As above no CGT on your PPR, and there is no time limit on when you buy again. If you are planning on buying in 2 years time the you need to invest in a capital secure arena, anything equity/risk based would not be sensible, including a Ferrari !

If it was me , I would put the maximum allowed in Premium Bonds (40K each?) and the rest in cash ISAs and deposit accounts.

[superlightr]

Ikemi said:

UpTheIron said:

Ikemi said:

Essentially, we're looking to sell our place and move into a flat owned by my parents ... Aside from cheaper living costs, it also gives us ample time to move out, clean our existing place, sell it, and then find a larger home elsewhere as cash buyers. As our existing place has increased dramatically in price, we should have a nice deposit ready for the next house. However am I liable to be charged capital gains tax on the amount? It's a consideration that a work colleague raised with me.

If this is the case, how would you invest the cash in order to circumvent capital gains? Do we need to buy a new property within 6 months of selling? We're planning to stay in the new flat for around 2 years. Alternatively, I jokingly said we could invest some of the money in a Ferrari F430 ... and the other half said, "If it doesn't lose value, why not?!". Probably a bad idea though ... yeah?

Assuming it was your PPR, then no liability.

https://www.gov.uk/tax-sell-home/private-residence...

Thanks for confirming, UpTheIron! I've read through the bullet points and it's a certainty that I will not need to pay capital gains ... The question now is, how best to invest the cash for 2 years? Any suggestions welcome! That said, I'll probably speak to a Financial Advisor in time.

Cheers!

DBS manual - best of both words....perhaps?