Sell my residential flat, move into my BTL?

[MANSFA]

I have two flats. One I live in, the other I rent. I want to sell both.

No capital gains due on the residential obviously, but there will be on the BTL. If I sell the residential flat, then move into the BTL, at what stage does it (THE BTL) become my primary residence and hence not subject to capital gains?

Appreciate you help.

[Eric Mc]

No hard and fast set time.

As long as you INTENDED that the BTL was to become your main residence, then it can be DEEMED to be your main residence. In some exceptional circumstances, you don't even have to move in (If you were forced to work overseas by your employer before you could move in, for example).

The main thing is that you start the process of moving in, change your postal adress, inform all interested third parties, start paying Council Tax, notify tax authorities etc etc etc. This will help establish the fact the the BTL is now your main residence.
If you actually do move in, that is even better. The longer you stay there, the more proof you have that it is/was your main residence.

[MANSFA]

Seems easy. I'll glady live there for 3-6 months then flog it.

Many thanks for your input.

[Eric Mc]

On4e it becomes your main residence, the last three years of ownership will also count as your main residence - even though you were renting it out for most of that time period.

[JustinP1]

Eric Mc said:

On4e it becomes your main residence, the last three years of ownership will also count as your main residence - even though you were renting it out for most of that time period.

So, if one was looking to sell their property portfolio, if they did a bit of moving, they could sell each residence, even though it could have been BTL for some years?

Is the minimum time three months?

[Eric Mc]

There are no time limits.

[JustinP1]

Eric Mc said:

There are no time limits.

Interesting!

I am just about to jump into BTL at the moment and I was planning on suffering CGT.

Is there any case law or guidance, as I am sure it would not be acceptable to live in a house for say a week and use the excuse that you always *meant* to live there but you changed your mind once you moved in or something!?

Or do the revenue simply not check on these type of things?

[Eric Mc]

Proof of "intent" to live there permanently would be required.

[JustinP1]

Eric Mc said:

Proof of "intent" to live there permanently would be required.

Hmmm, so if myself and my partner, were to 'split up' with her living in the BTL house for a while, I guess this might be plausible?

(Go on Eric, make it your 20,000th post! - that is insane, well done!)

[Eric Mc]

Justin artifical constructs deliberately set up with the sole purpose of mitigating and/or reducing a tax liability are usually easy targets for the Revenue. Any questioning by them would result in such an arrangement being seen to not reflect reality.

[2something]

I probably don't understand this correctly but how about something like:

If House prices are a lot lower in 3 years time, you can move from your main residence into your BTL and have a large capital loss on your main residence that you can use for offsetting other capital gains ?

[Eric Mc]

Since you aren't taxed on the capital gain when you sell your main residence, you won't obtain any tax relief if you make a capital loss when you sell your main residence.