Capital Gains Tax

[ck1]

I bought a house a while ago for 128K, in 2004 it was valued at 220K and I took out 60K for a deposit on a new house which is now my primary residence, the first property is being rented and has a mortgage of 187K.
I am looking to sell the rented property next year but am not sure whether CGT will be calculated on the original value of 127K or (220K) the valuation at the time of the remortgage, appreciate any info, thanks

[fairline]

cGT will be assessed on the purchase price originally paid. The trick with buy to let is NEVER sell, just keep remortgaging as the value rises. Providing the rental income covers mortgage payments, you are beating the taxman - for now at least.

[buildersmate]

You probably need professional advice - it will save you CGT when you eventually sell. You need to ensure that the IR are clear that the first property was your Main Residence until you moved into the other one. You then won't have to pay CGT on the increase in capital value up to the point where it ceased to be your Main Residence. There are rules that allow limited ownership of 2 residences for up to 3 years without paying CGT on either - its all about timing and you need guidance on this from a tax advisor because it could save you a bundle.