If we sell our rented property, which we moved out of ~2yrs ago what are our tax liabilities. The rented house is in both our names and we own the property that we currently live in. Is the tax calculated on the profit made based on the value of the property when we moved out before renting it, or on the original price we paid for the house 5 yrs ago? Does the capital gains tax allowance for both of us count, so we will have 2 x £9,200 to play with from 6 April? Any advice useful. Thanks
Was the property rented out by you before you moved in too?
If not, and it was your principle private residence (PPR) up until you moved out 2 years ago, then there will be no capital gains liability. You are tax exempt from any gain made on a former PPR for 3 years.
So if you sell it up to 3 years after moving out, there will be no tax to pay.
If you sell it 4 years after moving out, a quarter of the gain will be taxable. Sell it 5 years after moving out, two-fifths of the gain is taxable.
There are also more tax reliefs to which you will be entitled, based on the length of your ownership etc.
An accountant will clarify this for you, but from what you've said, there is no tax to pay anyway.
You can find out more from the Inland Revenue website.
Thanks for your reply. The house was not rented out before we moved into it, it was our main residence and only rented for the last 2 yrs. I wasn't sure if the rules regarding PPR were for 2 or 3 yrs.
