Will I have to pay Capital Gains Tax?

I am in the process of buying a house. I'm thinking of holding onto my existing residence which I own for at least a year. Will I have to pay Capital Gains Tax when I sell my current residence in a year or so? How is CGT owed worked out? Is there anything I need to look out for?

Thanks in advance!

If you sell your old house within 1 year of moving out of it (on the basis that it was your principal private residence while you did live there) then you won't pay any cgt on a gain on disposal.

If it is sold more than one year after you vacate it, then part of the gain will be subject to CGT at 20%. The amount which is subject to tax is time apportioned but you are deemed to have had it as your PPR for one year after you move out. So, if you own the house for four years and have lived in it for two (and rented or left it vacant for two before selling) then 25% of the gain will be subject to CGT.

Don't forget that CGT is now 22% after the last budget.

FKH said:

Don't forget that CGT is now 22% after the last budget.

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...and in the current climate, CGT rules are quite likely to change further within the next 12-18 months.

So, if you own the house for four years and have lived in it for two (and rented or left it vacant for two before selling) then 25% of the gain will be subject to CGT.

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Surely if it is PPR for 2 & vacant/rent for 2 then you will pay CGT on 50% of the gain @ 22% (assuming sold in 2009) less allowances & costs

sam h said:

Surely if it is PPR for 2 & vacant/rent for 2 then you will pay CGT on 50% of the gain @ 22% (assuming sold in 2009) less allowances & costs

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Nige said:

you are deemed to have had it as your PPR for one year after you move out.

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