Hi.. can anyone out there give me some advice.
I own 2 flats..one is rented out and i live in the other one. I want to sell the rented one. Is it true that i can avoid paying 40% capital gains tax if i move into the flat first ? And if so, how long do i have to live there before the sale can complete ?..and what proof of residence do i need?
You are thinking of Principal Private Residence relief (PPR). If you own more than one property, in certain situations it is possible to elect which property is your principal residence for CGT purposes. You should get expert advice as this isn't a simple area.
It's a legitimate question, and in any event it's HMRC who decide on each case.
When I last looked into it (as a result of being posted abroad) they operated a system of "taper relief" based on how long you were owner-occupier before and/or after the tenancy. So you couldn't move back in one day and escape CGT the next: it'd take some years of living there again before the liability disappeared.