Help! 2nd home tax on sale etc,

shininghero

Hi guys, I have several dumb questions. Here's our situation.

- We currently live in a rented house (sole/main residence)
- We currently own a flat outright and rent this out
- The flat is currently valued 50k below what we paid for 6 years ago

Q1 - My wife is worried that if we sell the flat at a loss now, then we need to pay 20% (or so) tax of the entire proceeds as this is not our main residence. Is that so? If we are renting our main residence or if we sell at a loss are we exempt from this?

Q2 - The flat is in joint names. Do I delare the rental income thru myself, thru wife or jointly (is this possible)? I already pay a lot of tax and she paid very little...


Any help will be much appreciated

CLAPTON

Potentially you only pay tax on the capital gain.. no gain no tax
so from what you have said if you sell then there is no capital gains tax as you will make a loss and not a gain.

Normally, rent income is considered 50% -50 % is there are two joint owners.
You only pay tax on the profit and not the actual rent... so you can deduct mortgage interest payments, maintenance, advertising costs, and 10% for wear and tear if furnished