Rent property rather than sell

When you next move house and decide on a new dwelling, instead of selling your old home you could let it, so that the rent covers the mortgage interest and other expenses. Then when you eventually sell the first property, its increase in value for the time you lived in it as your main home will be exempt from tax. The last three years’ worth of gain will also be deduced. In addition, you can claim a further tax exemption of up to £40,000 per owner because the property has been let. With the benefit of all these reliefs, you might find the gain on the let property is more or less tax free.

Because homeowners won't be able to use a rollover to defer taxable gains from their tax return these days it's important to keep tax records intact. In order to minimize your tax upon a home sale, keep detailed tax records and papers on home improvements, ranging from roof repairs to bathroom remodelling, to document a step-up in the home's value which tax lawyers call "tax basis." A higher tax basis reduces the size of the taxable home sale gain that you must report on your tax return.