Capital Gains Tax

donnythedebtmonster

Hi all,

This is my first post and i'm new to this game so please be gentle on me !

My question is, is there anyway of avoiding CGT on a BTL property ?

I have an investment property i'm looking to sell that i've never lived in. I would like to know the best way to sell and be liable for as little tax as possible. Can i remortgage to the max value and then sell therefore releasing all equity and, would i then still be liable for tax from what i originally bought it for ? Should i make it my principal residence and then avoid the tax and if so how long do i have to live there for ?

I hope this makes sense as it really is confusing me.

Donny

Tassotti

This is probably best moved to the tax cutting section.

However, you cannot avoid paying cap gains tax whatever you do. Remortgaging won't make any difference. You will still pay tax on the difference between what you bought and sold for.

I believe cap gains tax starts at 40%, then reduces year by year (by about 2% per year I think) You can offset various costs against the tax, such as solicitors fees, etc. You do get relief on a certain amount (about 7-8K per year) on property sold.

Making it your own residence probably won't make any difference either. The authorities will look at how long it has been rented for, how long you lived in it, and tax be worked out from that.

Sorry cannot be more specific, but if you post on the tax section, there may be accountants/tax advisors who could give you more specific answers.

silvercar

Living in a property gives you exemption for the last 3 years from CGT. So if you have woned it for 4 years then moved in for a year you get exempted from 3 out of the 5 years of ownership.

How long do you have to live there? A good few months seems to be enough to convince the tax people that it was a genuine PPR.