Downsizing into our Buy to Let?

Hi Maggie,

Why on earth would your accountant laugh?

There is no CGT if you sell your existing main residence and then if the BTL becomes your new main residence you will get PPR relief as well if you did sell.

Hi Neil, thanks for your reply, he laughed as I said we could move around the residential properties every few years if we got away with not paying CGT, but now we are seriously thinking of moving into one as our permanent home and wondered what our CGT tax liability would be?

Hi Maggie,
You can use the HMRC CGT calculator >> https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/disposal-date

Not sure i share your accountants sense of humour! No CGT payable on sale of your primary residence -your home . You are simply moving into another house you own so no extra tax liability as far as i can see . Good luck . Dont forget insurance should be changed on your buy to let becoming your home ie not let out .Good luck .

your accountant is a muppet. there is nothing wrong with structuring your affairs so as to avail yourself of the CGT reliefs existing at the time. if you sell your main residence there won’t be any CGT to pay. wherever you move to will become your new main residence and if you eventually sell CGT will have to be calculated on the basis of years of ownership vs years applicable for PPR relief and possible rental relief, the latter up to a maximum of 40K.

I wonder what other great advice your accountant has given you over the years.

Does he complete your tax return?

At least you have learned that your accountant is not worth retaining. Show him this thread – then fire him and get a property-friendly one. It would also be a bonus to get one who respects their customers too. Clearly this excuse for one doesn’t.
Sounds like he is merely a bean counter/administrator type. Pay a bit more and get one who can work towards your wealth.

Firstly I’d get myself a new accountant.
We asked our accountant about doing exactly what you propose. Our understanding is that you don’t pay any CGT on the sale of what is currently your primary residence, but that you do not escape CGT entirely when /if you come to sell the BTL property which you rented out until you moved into it. It seems that your CGT is calculated using the number of years you have owned and rented out the BTL property and the number of years you subsequently used it as your primary residence, as well as the increase in value since its purchase.
It may be worth it if your BTL has greatly increased in value since you bought it, but if it hasn’t, or you have owned it for a long time, the CGT saving may not be very significant.
Happy to stand corrected if we have misunderstood the rules!

It might be worth moving into your BTL property if you intend to stay their indefinitely. Your own residential home would be free from CTG upon sale, and if you never sell the BTL but stay there until death no CGT will be payable. Although your BTL could be liable for inheritance tax subject to you exceeding the £325,000 allowance.

Nancy has put it exactly right. That is of course if you hold this property in your own name and are not a company. I once rang HMRC to enquire about CGT if one moved into a rented property as I got fed up of friends telling me to move into my rented properties as my main residence to avoid CGT. If you have your rented property as your main residence then you will not accumulate any more CGT but you will be liable for the years you let your property if you sell. As I told HMRC they have the got us every way.