Capital gains on home and income?

Question from Carol updated on 18th April 2012:

With all the talk about capital gains tax, I wondered how it would affect a home and income. My house is split into two halves - top and bottom. I live in the top half and my tenant in the bottom. I purposely bought this property to assist me with my mortgage. Would it be subject to capital gains tax? Although it is a legal income, the water meter is shared, the gardens etc. Many thanks

Our expert Mark Withers responded:

There are many unanswered questions around Labour's proposed capital gains tax. But this stage it is only a policy statement from a party that must first win the general election before anything tangible will be seen with respect to the detail of the tax legislation needed to enact it. Labour has said though that a taxpayer's residence will be exempt, this may come with a predominant purpose test or perhaps at worst the requirement to aportion the gain for tax purposes. It's all just speculation though at this stage.

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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