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  • Tax

    Delaying sale into next tax year

    Looking at ways to delay the trigger for CGT into the next tax year on a house sale ? Ive already used my CGT allowance for 17/18. Have a property that I wish to sell.

    House will be empty next month, looking to sell but would prefer exchange after 5th April.

    Options  -

    short term rent for a couple of months whilst selling - risk -  getting tenants out .

    Sell with conditional exchange - what condition would satisfy HMRC ?

    Leave empty for 4 months?

    Any ideas please?

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    I don't think there is any way you can avoid this if completion takes place before April the 5th.

    If you wanted to exchange earlier you would have to make it a condition that completion took place on or after April 5th or your chargeable event day would be the exchange date. I think doing a conditional exchange makes the chargeable date move to when the condition is fulfilled ie the 5th of April.

    See this as it may help a little.

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    Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk

    So is the chargeable date on exchange or completion?  What makes it conditional? (ie is there some special contract or wording?)

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    As everyone else has said non conditional contracts create a chargeable event day which is the day of exchange. As for what would make it conditional, I would suggest the best person to ask would be your conveyancing solicitor, I am sure they will have a reason to make it suitably conditional and hold the CGT over to the next tax year. At least that way they will be responsible if it fails.

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    Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk


    Thinking outside the box, you could also offer the purchasers a licence to occupy until April 5th meaning someone will be in the house till then and they won't mind as much having to wait for completion. Just a thought.

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    Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk

    If the property is furnished and in good condition, you could look at doing short term lets for a few months to bring in cash while waiting until the end of this tax year.  Services like Airbnb and Bookings.com make this relatively easy to get started.  This way you don't have to worry about finding tenants for such an awkwardly short period and the property is sure to be vacant when you want it to be.

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    Thanks for the advice, im guessing that one of the crucial things will be the nature of a conditional exchange. It would probably have to be something tangible to stop HMRC claiming it was entered into purely for avoidance purposes. I like the idea of a licence to occupy as well.

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    What about an option to be exercised next tax year?

    A conditional contract wouldn't work if the only condition is completion after 5th April

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA


    For CGT the relevant date is exchange of contracts if unconditional or the date the conditions are met if conditional eg conditional on grant of planning permission .

    https://www.taxationweb.co.uk/tax-articl...osals.html

    Original post amended as inaccurate

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    For cgt it is exchange unless the contract is conditional in which case it is when the condition is fulfilled

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA