Hi, I’ve got a question regarding UK capital gains tax – I am the sole owner of a house, which is my current permanent residence. My mum and my grandmother also live at the property, and they pay a rent to cover 100% of the mortgage. The property is never in profit – their contribution covers the mortgage, and is declared on my tax return. My question is, in future, will there be a capital gains tax liability on the property when I come to sell it? I heard from a friend that the rules on renting to more than one ‘tenant’ become complicated with regards to capital gains tax, so any advice would be appreciated! Obviously, being family, we haven’t got any official contract drawn up between us. It’s an informal arrangement as such. What I’m also keen to find out is if the situation changes should I buy a second property for myself to live in (and declare as my permanent residence). If you require any other info to advise in this matter please let me know and I’ll add a further comment!
Family don’t count if they are living with you. It’s not rent they pay you it’s a contribution for utilities etc.
You may also be interested to know that you can have a lodger in your home and receive circa £4000(approx) rent which is allowed tax free, see the link below
So long as you are ‘officially’ living at that address (i.e. it’s where your post goes, address on your Passport, driving license & you are Registered to Vote there), you should have no difficulty proving it’s your sole permanent residence to the Taxman …
.. and there is never any CGT to pay on your permanent residence, even if you are not there half the time (it is only likley to be an issue if you own more than one property anyway)
You COULD be liable for Income Tax on the Rent being paid (you are allowed up to £4,250 a year Tax Free under the ‘rent a room’ scheme .. anything above that becomes taxable at your highest rate)