Cgt Or Income Tax

[noddynoo]

I have bought a flat and decided to sell and not even live in it. It is a bit of a wreck and I have started the work which will increase the value a bit. Does this come under capital gains?

[Peter Pedant]

UK

definitely Capital gains

register it with the tax man as your first residence and make sure alll the bills go there and erm you do live in it

and then there will be no tax to pay as it is your primary residence

IF you decide to let it - then that needs to be declared as income

(allowable expenses are different)

[noddynoo]

I am paying bills etc council tax just I have decided its not for me and just want to finish it off and sell and buy somewhere more suitable.

[New Judge]

Then if you are not prepared to make it your "principle residence" then CGT will be payable. Bear in mind that the "Gain" is the difference between the purchase price (or valuation price if you did not buy it but it was, say, left to you in a will) and the selling price. Also bear in mind that expenses incurred in modernisation/developement are usually allowable to offset against profit and that the CGT allowance for 2013-14 is £10,900.

[noddynoo]

It is my only property. I am renting and was due to move out and into the new place next month Maybe I should!

[noddynoo]

If I am paying council tax and bills etc while flat is redecorated is it my principal,residence or is that the rental I am living in

[buildersmate]

No, the rental you are living in would be treated as your Principle Private Residence. You have to take some basic steps to establish this with HMRC, which should include:
1) writing to them to tell them it is your PPR
2) ACTUALLY living in it. This means (at least) your mail should be going there.

However, as NJ pointed out, you can make nearly £11k of capital gain (and this would be the 20013/14 tax year now) in the tax year you sell it before any tax would actually be liable.

[noddynoo]

Thanks builders I will do that. I am going to move into it to save teh rent I am currently paying. My mail is already going there

[jake-the-peg]

I suppose all this helpful advice on declaring your principal residence is presuming you're not an MP in which case this would be highly unacceptable 'house flipping'

;c)

[noddynoo]

No I am not an MP! I am just trying to find out what to do I am not trying to avoid anything and will pay what I owe!