Many people acquire a second property in their lives.
At the time they acquire the second (or subsequent) property, they may have clear intentions of which property will be used for their own home.
Because of this, they may consider it unnecessary to make a capital gains nomination for that respective property to be their main home for capital gains tax purposes.
As we know, circumstances in life change.
A main home nomination can only be made within two years of acquiring an additional property.
Once made, a nomination can be amended at any time in the future.
So by making the initial nomination it potentially gives the individual scope to amend which of their properties is sheltered from capital gains tax in the future.
“In the absence of that initial nomination the capital gains tax exemption will always follow the facts of which home was actually used at which times,” said Melanie Tomkins, tax manager at Ellis & Co Chartered Accountants and Business Advisers.
“Therefore, where more than one property is used in future as a home at some point, then doing the initial nomination (at a time when it seems unnecessary) can give greater scope to mitigate future capital gains tax liabilities.”
“If you have acquired an additional property in the last two years I recommend making a formal nomination that your current home is your main home for capital gains tax purposes.
“This will give flexibility in future if you ever find yourself moving between more than one of your properties at different times in your life.”
If you would like us to consider this for you please contact Melanie on 01244 343504.
Ellis & Co Chartered Accountants and Business Advisers, Chester & Wrexham - 01244 343504, firstname.lastname@example.org