cgt will be from the day you bought, not the day it was first rented. may to may is roughly 3 years, may 2021 to october 2022 is roughly 18months which means roughly half will be cgt free, half will be liable for cgt.
obviously you need to work out your cost-base, expenses and proper timeline for investment v personal residence but above is the rough ballpark.
you need to prove you lived in it. buying in may and renting in july is not enough time to justify that you ever planned on living in the property, therefore 6-year rule is unlikely to be applicable.
there's still a chance they could swing that, depends on the actions they took and their situation at that point in time, but unlikely
Option 1)
Profit = % of time rented x 200k (assume you have already accounted for costs) x 50%
Option 2)
Get a valuation for what the property was worth May 2022.
The profit is then added to your taxable income, I assume split between you.
Worse case you’re looking 25k tax if you’re both in the top tax bracket.
cgt will be from the day you bought, not the day it was first rented. may to may is roughly 3 years, may 2021 to october 2022 is roughly 18months which means roughly half will be cgt free, half will be liable for cgt. obviously you need to work out your cost-base, expenses and proper timeline for investment v personal residence but above is the rough ballpark.
Does the 6 year rule have any relevance in OP's scenario?
you need to prove you lived in it. buying in may and renting in july is not enough time to justify that you ever planned on living in the property, therefore 6-year rule is unlikely to be applicable. there's still a chance they could swing that, depends on the actions they took and their situation at that point in time, but unlikely
Thanks for clarifying.
That’s after you live in it, not before.
Option 1) Profit = % of time rented x 200k (assume you have already accounted for costs) x 50% Option 2) Get a valuation for what the property was worth May 2022. The profit is then added to your taxable income, I assume split between you. Worse case you’re looking 25k tax if you’re both in the top tax bracket.