| Miss Slaves sister has a housing question. 20:21 - Sep 15 with 1182 views | BanksterDebtSlave |
She currently lives in Addlestone in a mobile home and pays a site rent. She hopes to spend some inherited money on a modest bungalow which needs doing up so not selling immediately. Does this mean that when she sells the mobile (second????) home she will have to pay capital gains tax as well as the 10 per cent of the selling price she has to give to the landowner? |  |
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| Miss Slaves sister has a housing question. on 21:11 - Sep 15 with 1090 views | longtimefan |
I believe it’s a time based thing. A colleague at work did something similar and had to have sold the first property within a certain timeframe to avoid capital gains tax. I honestly can’t remember what the timeframe was, though I’m pretty sure it was at least a year. |  | | |
| Miss Slaves sister has a housing question. on 21:23 - Sep 15 with 1075 views | GeoffSentence |
I asked Junior Sentence to help out with this one as he is training to be a tax specialist.
He was at great pains to stress that he is only training so this should be checked with a qualified expert but as he understands it, if she is living in the moblie home whilst she is doing up the second home, her mobile home will count as the principal private residence. At the point that she moves into the refurbished house she should then have a 9 month window to sell the mobile.
He also said to check principal private residence on gov.uk , I found this link
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-a |  |
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| Miss Slaves sister has a housing question. on 21:35 - Sep 15 with 1045 views | longtimefan |
| Miss Slaves sister has a housing question. on 21:11 - Sep 15 by longtimefan |
I believe it’s a time based thing. A colleague at work did something similar and had to have sold the first property within a certain timeframe to avoid capital gains tax. I honestly can’t remember what the timeframe was, though I’m pretty sure it was at least a year. |
https://www.theadvisory.co.uk/house-selling/buying-selling-houses/
This suggests you have 18 months to sell before being liable for Capital Gains and up to 36 months to be able to claim back the 3% additional stamp duty due on the purchase of a second home. | | | |
| Miss Slaves sister has a housing question. on 23:01 - Sep 15 with 920 views | BloomBlue |
So are you saying she will buy the property do it up and then move in meaning that is her main property and then sell the mobile home?
If yes then yes she would have to pay capital gains tax on the 'second' property the mobile home. But remember capital gains only covers the profit, so if she paid £100k for the mobile home and sold it for £120k capital gains would be based on the profit £20k.
Now I know you can offset some costs against that to reduce the profit total, but I dont know if the 10% to the landowner is a cost you can use to offset against the CG |  | | |
| Miss Slaves sister has a housing question. on 07:24 - Sep 16 with 818 views | BanksterDebtSlave |
Thanks all for the replies and links. | |
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| Miss Slaves sister has a housing question. on 07:28 - Sep 16 with 816 views | BanksterDebtSlave |
| Miss Slaves sister has a housing question. on 23:01 - Sep 15 by BloomBlue |
So are you saying she will buy the property do it up and then move in meaning that is her main property and then sell the mobile home?
If yes then yes she would have to pay capital gains tax on the 'second' property the mobile home. But remember capital gains only covers the profit, so if she paid £100k for the mobile home and sold it for £120k capital gains would be based on the profit £20k.
Now I know you can offset some costs against that to reduce the profit total, but I dont know if the 10% to the landowner is a cost you can use to offset against the CG |
Just when it was all going swimmingly some conflicting advice. What if she stays in the caravan until it sells? | |
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| Miss Slaves sister has a housing question. on 07:51 - Sep 16 with 798 views | BloomBlue |
| Miss Slaves sister has a housing question. on 07:28 - Sep 16 by BanksterDebtSlave |
Just when it was all going swimmingly some conflicting advice. What if she stays in the caravan until it sells? |
So live in the caravan and do up the house and then sell the caravan and move to the house, is that your question?
Then yes she wouldn't pay capital gains in that situation.
It's all down to what you (she) classes as her main residence. | | | |
| Miss Slaves sister has a housing question. on 07:54 - Sep 16 with 796 views | BanksterDebtSlave |
| Miss Slaves sister has a housing question. on 07:51 - Sep 16 by BloomBlue |
So live in the caravan and do up the house and then sell the caravan and move to the house, is that your question?
Then yes she wouldn't pay capital gains in that situation.
It's all down to what you (she) classes as her main residence. |
That's the one....cheers. | |
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| Miss Slaves sister has a housing question. on 09:33 - Sep 16 with 743 views | BloomBlue |
| Miss Slaves sister has a housing question. on 07:54 - Sep 16 by BanksterDebtSlave |
That's the one....cheers. |
Np, I would also add once she moves in she does need to live there for a period (I think it's 6 months) to have it classed as her main residence. If she sells it as soon as she moves in she could still get hit then with capital gains tax as the tax man would argue it was a second home. But she would need to check that with someone who has more knowledge on that 'period' rule than me | | | |
| Miss Slaves sister has a housing question. on 10:01 - Sep 16 with 712 views | EdwardStone |
| Miss Slaves sister has a housing question. on 09:33 - Sep 16 by BloomBlue |
Np, I would also add once she moves in she does need to live there for a period (I think it's 6 months) to have it classed as her main residence. If she sells it as soon as she moves in she could still get hit then with capital gains tax as the tax man would argue it was a second home. But she would need to check that with someone who has more knowledge on that 'period' rule than me |
I did actually enquire this with my accountant a few months ago
His answer was that there is no "minimum period" of having a house as your main residence....so technically she could sell a couple of weeks after declaring it as her main dwelling
The taxman might be interested and raise concerns, but if she is able to prove a change of circumstances that dictated that she must sell....eg, needing to buy a bigger house to be able to become a carer for a family member, moving from house to bungalow because of mobility issues etc
Where the tax people become extremely interested is if you sell, move, sell, move and it becomes a pattern of behaviour without waiting for a respectable period between moves
Disclaimer
This is just my report of an opinion and she should check with her own advisors not just rely on some random off the internet before making any decision |  | | |
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