We have lived in serviced accommodation in the UK and overseas for nearly 20 years, and have a property that has been rented all that time. If we move into that property will we be liable for capital gains tax (CGT) when we move in? Also, if we then decide to sell that property, will there be a CGT liability, or can we defer it to the new property?

Arthur Weller replies:
If you move into the property now and make it your legitimate principal private residence (PPR), thenall the time you live in it will be exempt, but the first 20 years will be subject to CGT. However, if you sell before 6 April 2020, you will get 18 months’ ‘final period exemption’, but if this overlaps with the period you spend living in the house, you only get the one which is longer, not both. After 5 April 2020, the final period exemption is being shortened to nine months. Additionally, if you sell your PPR before 6 April 2020, you are eligible for lettings relief. However, no deferral relief is available in this situation if you decide to buy a new property.