Breaking house chain and CGT

Hi Our house is up for sale and we have an offer accepted on a house to purchase. If we were to purchase the house as a second property whilst our original property is still up for sale would we have to pay CGT when the original house sold? We would continue living in our original property whilst up for sale and while renovation works start on the second. We have lived in the house 7 years and have never rented it out. We would simply be moving from one primary residence to another. Is there a specific time frame and / or documents to complete to declare situation etc? Is anything due to change with new government? I understand that we would need to pay more stamp duty that can will be refunded. Thanks

Hi,
It is unlikely that there would be a capital gain on the disposal of your main residence, but this may depend on how long it takes to dispose of your old property.  
Please have a look at the guidance on private residence relief at HS283 Private Residence Relief (2024)
Thank you.

Thank you. We have now decided to rent out our original / current property once the sale completes on the second property. Please can you advise how we evidence the £90,000 increase our house has made in the seven years since we purchased whilst we have lived in the house to avoid CGT on this if we were to sell at a later date. Is the current house valuation by an estate agent sufficient? Thanks

Not HMRC...the £90k is irrelevant. Starting to rent the property is not a trigger date for CGT. When you sell the property the gain is time apportioned over the entire period of ownership, i.e. total gain (including the £90k) x number of months PPR/number of months owned in total is the exempt gain, the balance is chargeable (allowing for 9 months exempt)...it is only the sale proceeds that are relevant on sale, not the value now. The ONLY way for the £90k to escape tax altogether is to sell now or if the market falls from now to sale.

https://www.gov.uk/tax-sell-home/let-out-part-of-home As you can see, the gain is over the entire period of ownership, the value when you let it out (so the gain when it was your PPR) is not separated...there are various links via that page which explains how its apporitioned

Hi Danielle,
This is not taken into account at this point.
It is only when the house is sold and it is the overall gain for the whole period that is considered.
You can then claim Private Resdience Relief for the period you lived in the property.
Thank you.