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Phillip Fry
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United Kingdom Rules To Sell Your UK Home Tax-Free
by Russell Lawson, Federation of Small Businesses Wales, as published
at http://news.bbc.co.uk Throughout the period that you owned it, it was your only home.
You did actually use it as your home all the time that you owned it.
Throughout the period that you owned it, you did not use it for any
purpose other than as a home for yourself, your family and no more than one
lodger. The house and garden do not exceed 5,000 square metres (about one and a
quarter acres - roughly the size of a football pitch). Yet the rules in this area are still quite hazy. The Inland Revenue will usually like you to live somewhere for about two
years, but this is not set in stone. If you keep buying somewhere, renovating it, then selling it on after a
year, the Revenue might view this as a business, so you have to tread
carefully. The problem with doing what you are doing is that, as you say, mortgages
will have to be paid while you are working on the property. What you could do is renovate a few rooms early on - a bedroom, bathroom
and kitchen - then let out the furnished rooms in your home, for which you
can receive up to £4,250 a year tax-free. This is known as the Rent a Room scheme, and is an optional exemption
scheme that lets you receive a certain amount of tax-free "gross" income
(receipts before expenses) from renting furnished accommodation in your only
or main home.
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