No, we're not talking about tax evasion here, just some careful planning! The easiest way to avoid capital gains tax is by taking advantage of the main residence exemption and moving into the property for a short time.
If, for example, you live in it for a few months, declaring it as your main residence, CGT would not be payable, even if you then rent it out for three years before selling. This is because the final three years of ownership are treated as part of the main residence exemption.
Another point worth mentioning is that married couples and civil partners are only allowed one main residence between them. If you're unmarried, you get one each - so you can declare one property each as your main residence.
To find out whether you can take advantage of the various exemptions relating to CGT, it's worth speaking to an accountant. Yes, it will cost you, but for the advice a good accountant can give you, and the potential amount he could save you in tax, you could easily save more than the fee.
For the most up-to-date advice and further information, contact your local tax office or visit the HMRC website.
The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.
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