CGT on rented flat

[mutantpoodle]

not unusual I think !!

my daughter owns her flat, and lived in it for some time... but has now moved in with her boyfriend and rented her flat out
of course she declares the rent and costs etc on her tax return
but
is there any time limit on how long she can do this (renting it out) before it becomes deemed CGT liable when sold...as perhaps it might be at some time in future if things work for them and they both sell their flats to buy one joint house

we assuming no collapse of prices!!!

[mc2fool]

"You’ll pay tax on your ‘chargeable gain’. This is your gain minus any Private Residence Relief you’re eligible for.

You get full relief for:

the years you lived in the home
the last 9 months you owned the home - even if you were not living there at the time"

https://www.gov.uk/tax-sell-home/let-out-part-of-home

But as always there are some quirks, so do read the whole section, starting from https://www.gov.uk/tax-sell-home

[Eboli]

Worth adding that if your daughter isn't using here CGT annual allowance elsewhere then the period beyond 9 months before she hits a taxable gain could be quite long. The annual allowance is £12.300 (though do check as I'm becoming more dithery by the month).

For example suppose your daughter bought the flat, say, 5 years ago for £400K. And after 5 years she moved out to live with her boyfriend. Then suppose she eventually sells the flat for £500K after all the expenses of sale.

What we need to know is when does the gain of £100K (£500K - £400K) = ({(L - 5.75)/L] x £100,00} + £12,300), where L is the total period of ownership in years. That equation suggests L = 6.556 or about 6 years and about 29 weeks. So she could live away for just over 18 months before a taxable gain would arise.

Eb