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  • Tax

    Capital gains on residential property

    If an investor owns a single property which they live in whilst adding value to it at the same time with a view to selling that property for a profit as is my case, is there any likelihood of attracting a liability for capital gains tax if there's too small a period of time in between buying and selling?

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    On paper to get Private Res Relief it is not about how long you lived there but the quality of residence and intention. So if you move into a place and really live there for a year but have intended from the start to sell on as a profit rather than buy a residence then you are not entitled to PRR. In practice if you lived in a house and sold it, bought another and did the same 2 years later HMRC would allow relief and not bat an eyelid. Keep doing it and they will come to you for all previous tax as well

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    Thanks Fl for your thoughts, the last house I owned took a fair amount of time to refurbish and it turned out to take longer than I''d thought, the house I'm currently purchasing could potentially be sold fairly soon after purchase  relatively speaking as would just need a garage conversion and so as I've not got an accountant to ask I'm trying to get a feel for what I might need to be prepared for. At least if I'm liable for tax it means I'm making a profit I always think which is better than not

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    I asked a similar question recently https://www.propertytribes.com/investor-or-developer-t-127630066.html

    You may be liable for Income Tax instead of Capital Gains Tax, if you don't qualify for PRR.

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    Thanks Gary, I'll take a look

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    The property that I'm now selling is the only property that I own but because it was such a big refurbishment project it was difficult to live in full time and therefore I've mainly lived somewhere else so it could be said I wasn't completely living in it whilst the refurbishment was taking place and so am wondering if I could potential be liable for an unexpected capital gains charge? The amount of profit is around £60,000

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