Capital Gains Tax On A Right To Buy Property.
Discussion
Hi,
I'm in a fairly unusual position, in that I lived in a council flat for 20 years and then purchased the lease as a right to buy. I then lived there for a further 5 years, before being forced to move into rented accommodation in a cheaper area.
I had tried to sell it, but due to cladding issues, that wasn't possible. As I will sell it at some point, I'm curious as to whether the whole period that I lived there is used in any CGT calculation, or just the part after I purchased the leasehold.
From what I've read, it will make a huge difference to the cost. I've tried finding the answer elsewhere, but I've drawn a blank. Thanks for any replies!
I'm in a fairly unusual position, in that I lived in a council flat for 20 years and then purchased the lease as a right to buy. I then lived there for a further 5 years, before being forced to move into rented accommodation in a cheaper area.
I had tried to sell it, but due to cladding issues, that wasn't possible. As I will sell it at some point, I'm curious as to whether the whole period that I lived there is used in any CGT calculation, or just the part after I purchased the leasehold.
From what I've read, it will make a huge difference to the cost. I've tried finding the answer elsewhere, but I've drawn a blank. Thanks for any replies!
catman said:
Hi,
I'm in a fairly unusual position, in that I lived in a council flat for 20 years and then purchased the lease as a right to buy. I then lived there for a further 5 years, before being forced to move into rented accommodation in a cheaper area.
I had tried to sell it, but due to cladding issues, that wasn't possible. As I will sell it at some point, I'm curious as to whether the whole period that I lived there is used in any CGT calculation, or just the part after I purchased the leasehold.
From what I've read, it will make a huge difference to the cost. I've tried finding the answer elsewhere, but I've drawn a blank. Thanks for any replies!
So you had council property with a big discount, lived in it for 5 years to meet purchase conditions and avoid discount clawback, then I'm guessing you’ve been renting it out?I'm in a fairly unusual position, in that I lived in a council flat for 20 years and then purchased the lease as a right to buy. I then lived there for a further 5 years, before being forced to move into rented accommodation in a cheaper area.
I had tried to sell it, but due to cladding issues, that wasn't possible. As I will sell it at some point, I'm curious as to whether the whole period that I lived there is used in any CGT calculation, or just the part after I purchased the leasehold.
From what I've read, it will make a huge difference to the cost. I've tried finding the answer elsewhere, but I've drawn a blank. Thanks for any replies!
It’s not at all unusual, Its is why we have an affordable housing crisis.
CGT payable on full uplift post purchase, however no cgt on % of ownership you lived there personally plus 9 months.
There is presumably no cost in this scenario? Just a huge profit to be eventually made.
Edited by bennno on Sunday 23 January 00:46
The rules on this are pretty simple, cgt is payable on the difference between the purchase and sale price, less the % of time since purchase that you personally lived in the property as your main residence plus 9 months, less any unused cgt allowance.
You can't count residency periods pre purchase.
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