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House conversion into flats: Will I be liable to CGT in the future?

Question:

I am thinking of converting the first two floors of my home into self-contained flats, and then renting them out for a few years. I would continue to live on the ground floor. Would I be liable for capital gains tax (CGT) when I come to sell the flats? 

Arthur Weller replies:  

Depending on the numbers involved, there will potentially be CGT when you eventually come to sell the flats. See HMRC’s Capital Gains Manual at CG65271. 

I am thinking of converting the first two floors of my home into self-contained flats, and then renting them out for a few years. I would continue to live on the ground floor. Would I be liable for capital gains tax (CGT) when I come to sell the

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This question was first printed in Property Tax Insider in August 2025.