I owned a property for 35 years but let it out for seven of those years. It has been the only house I have owned. Am I exempt from paying capital gains tax if I sell?
Arthur Weller replies:
You are exempt from capital gains tax (CGT) for: (a) the period you lived in the house as your main residence; and (b) the last nine months of ownership, whether you were living there then or not. Let's say you bought the house for £50,000, and sell it now for £400,000, so your gain over 35 years is £350,000, which equates to £10,000 per year. If you let it out for seven years, and those seven years do not overlap with the last nine months of ownership, your CGT liability will be on £70,000. You will be able to reduce this by the CGT annual exemption, currently £12,300.