Care home residents could be caught in CGT trap
Those who hang on to their old houses, classified as a secondary residence, are in line to pay tax if they sell a property which has increased in value after three years
Elderly people living in care homes may be caught in the capital gains tax
trap, advisers have warned.
The coalition government is gearing up to raise CGT from 18% to possibly 40%
for non-business assets such as second homes.
Those being looked after but still hanging on to their old houses would have
to pay capital gains tax, because the care home is classified as their primary
If they sell their house, treated as their secondary residence after three
years, they will be liable for CGT if the property has gone up in value.
Stephen Herring, senior tax partner at accountancy firm BDO, told the
Telegraph: “There is no special relief for people who move into care homes.”