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CGT and Second Homes
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Newbie
Posted: 22 May 2023 13:36:25(UTC)
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Hello all

I am hoping forum members can help with a dilemma.

Does anyone know what the CGT situation is with a second / holiday / get away home is ?

I understand the position with a BTL / Rental property and have been through this a few times.

However the second home seems an anomaly and the HMRC resources are mind boggling.

It was bought as a second home / retreat from the outset and we used ourselves only (no family / friends use - unless we invited them for a get together) and never used it for commercial purposes.

Do we need to pay CGT on the full value of the gain even though we never used it as an investment ?

Thank you all in advance
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pittrivers on 06/07/2023(UTC)
Sara G
Posted: 22 May 2023 13:40:17(UTC)
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I've been immersed in this subject for a couple off days, and yes it is quite baffling.

My understanding is that in your situation you would be liable for CGT on the full gain (less selling / improvement costs), as you only get PPR (Principal Private Residence) relief on one property, which would be your main home. You would have had to nominate the holiday home as your main residence for part of the time in order to get any relief on it, but this would reduce the relief you'd get on your main home. Of course if you never intend to sell your main home it might be worth doing that. A nomination can be backdated up to 2 years I think.
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Newbie on 22/05/2023(UTC)
Sara G
Posted: 22 May 2023 14:05:53(UTC)
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Incidentally, I suspect the ability to flip PR status between properties regardless of actual living arrangements only survives because so many MPs take advantage of it...
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3 users thanked Sara G for this post.
Tim D on 22/05/2023(UTC), lenahan on 30/06/2023(UTC), Newbie on 04/07/2023(UTC)
Stephen B.
Posted: 23 May 2023 13:27:05(UTC)
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This is not an anomaly - in general you have to pay CGT on any asset when you sell including houses. Really the anomaly is that your main home is exempt, but you are only allowed to have one main home at a time. If you've always owned the other property as a second home the calculation won't be especially complex, it's much the same as with shares, the gain is the difference between what you get from it and what you paid less the transaction costs.
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1 user thanked Stephen B. for this post.
Newbie on 23/05/2023(UTC)
lenahan
Posted: 30 June 2023 02:14:41(UTC)
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Sara G;267698 wrote:
Incidentally, I suspect the ability to flip PR status between properties regardless of actual living arrangements only survives because so many MPs take advantage of it...


MP registered at the London property/flat and the partner on the main country home. x2 lots of PRR would be the name of the game I would imagine.
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Newbie on 04/07/2023(UTC)
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