Capital gains tax

You may have to pay CGT if the cottage has increased in value since you bought.
Impossible to say how much without knowing the values. When we had this issue our accountant worked it out for us

You will pay CGT on the difference between the purchase price and the selling price. There are amounts that can be deducted, such as certain fees and costs of some improvements if you bought a wreck’. It will be different for each individual circumstance especially if you’ve already used the CGT in that tax year. You may need to spread each sale over two tax years.
I’m not in any way an expert, but we have looked into our situation should we want to sell our second home.When we sell we will use our accountant to sort the tax.

You will only be liable for capital gains tax on any increase in value over the period during which it was not your main home, which sounds like 2012 to date. You have an allowance of £3k before you have to pay tax. You can deduct various expenses. See below
www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/

Your husband will not have to pay CGT on the house you both live in, assuming it has always been his main residence.

Exactly what I was going to put GSM but I’d waffle!

No you wouldn’t!

If you sell your holiday cottage, you might have to pay Capital Gains Tax. It depends on factors like how much profit you've made. Best to chat with a solicitor or accountant who knows about property tax.

I am a retired solicitor thank you.

I’m a terrible waffler! 😂

Nah! Never seen you waffle! 😊

Hopefully you have good records of all improvements (not normal maintenance as decorating would be). Perhaps before you make an appointment with a solicitor, cobble together records of all money spent on your cottage.

I'd likely go through my old diary, checkbook, bank records - looking for costs I may have forgotten, if I were you.

I keep yearly books&envelopes/folders - maybe you do that as well?

GSM, may I pop in with a quick question about this?

If the OP owns one property and her husband owns the other one, are they both considered joint ownership because they are married?

No. Neither is owned jointly.

Thank you.
Why does CGT have to be paid in that case, if they are owned by two different people?
One is a home and the other a business.
I’m not questioning you btw, just trying to understand.

CGT is only payable on the sale of the holiday cottage. The OP owns the holiday cottage and she will be responsible for payment of any CGT due when it’s sold. The CGT will only be due in respect of the period when it has been a holiday cottage, not for any previous time when it was her main home. Her husband doesn’t own the holiday cottage and is not responsible for any CGT payable when it’s sold. He alone owns the home they live in now and you are not liable to pay CGT on the sale of your main or only home unless for part of your ownership it wasn’t your main home.

Thank you for explaining it all GSM - I get it now!

Good! If you have more questions let me know.

Thanks everyone, food for thought!

One more thing to bear in mind - sell your cottage before buying another property with your husband. If one of you owns another property when buying the new one, you will be charged extra stamp duty. You have (at present - Lord knows what Labour will do) three years to sell the property which triggered the extra stamp duty and reclaim it, but it’s an additional expense when moving which can be avoided by selling the holiday cottage first.

I would look into selling your husband’s home first and moving into the cottage and living there for a short while, I can’t recall how long but you can look it up then you can sell the cottage to be closer to your family without incurring CGT I believe unless our lovely new Labour government slap CGT on the sale of your primary residence which there is talk of …

CGT will be payable on any increase in value of the holiday cottage whilst it was not used as the OP’s main home. You can’t cancel that out. If the OP moved into the holiday cottage tomorrow there would still be that period from 2012. Frankly I would sell the holiday cottage before Labour have a chance to increase the rate of CGT, which I firmly believe they will do. The point at which CGT is triggered is exchange of contracts, and as we know the market is slow at present. I too worry about a possible charge to CGT on disposal of one’s main residence, though that would decimate the housing market because nobody would move unless they absolutely had to. Would they be so stupid? I wouldn’t rule anything out.

Don’t spread alarm GSM - Labour have categorically stated that they will not add CGT to primary housing.

It isn’t fair to use your (apparent) knowledge to spread opinions that are not right.

At present unearned income in the form of profit, from the sale of assets like property, art work, shares etc is taxed at a much lower rate than earned income.

Frankly I think this is unfair and have no problem with it being brought more in line with PAYE.

None of us knows what Labour will do. We only know what they say they ‘don’t plan’ to do. I have warned the OP that the rate at which CGT is charged may change, as any responsible person would, and obviously you don’t disagree, in fact you as a member of the LP are in favour of it being aligned with income tax. As someone who pays CGT (primarily on share dealing) it’s something on which I keep a close eye. An increase in CGT will hit the market badly as everyone offloads stocks.

As regards CGT on one’s primary residence, you will see that I was commenting on the previous poster’s post. What I said was not ‘spreading opinions that are not right’. You have no more idea of what Labour will do than I, but we are all entitled to our views of what may happen.

I am not a member of the LP - you are assuming incorrectly.

Neither did I say that I was in favour of aligning CGT with income tax.

Of course I would expect you to be annoyed if your profit from the sale of shares was a tad less because you were paying a bit more tax. Other asset holders will not. But your assumption that the market would take a hit is way off the mark. There is absolutely no danger of a bear market and any drop will be very short lived.

I am pleased to see that you recognise that your opinion may be wrong.

If I made a mistake as regards your membership of the LP, my apologies.

Saying that CGT should be brought more into line with PAYE seems to me to be saying that it should be in line with income tax - something which I fully expect Labour to do.

Anyone who keeps a close eye on the market, as I do, will know when to sell to avoid or minimise CGT - during their ownership of shares they will have received dividends and the rate of tax on dividends is something else Labour are likely to change.

I do expect a significant fall in the market if Labour tamper with tax on dividends or CGT rates. I, and I’m certainly not alone, would sell and put the money elsewhere. For the duration of a Labour government, under the mattress may be the best idea!