Following an inheritance, I am able to purchase a new property outright whilst living in our current home, which is still currently mortgaged. The new property will be our main place of residence, but only after light renovations are completed on the current house in readiness for sale. We would continue to live in and pay the mortgage until it is sold and the mortgage settled. Under the circumstances, would we be liable to pay any capital gains tax (CGT)?
Arthur Weller replies:
If you have lived in your current house as your main residence all the period of your ownership, principal private residence relief will mean no CGT on its sale. However, if you have only lived in it as your main residence for part of your period of ownership, in very simple terms the CGT relief will be in proportion to the period it was your main residence.