How can you prevent paying income tax on second home?

ManAtHome

You can make up to £10,100 capital gains each tax year without paying CGT http://www.hmrc.gov.uk/rates/cgt.htm so no CGT to pay based on your estimate of the current value.

ILW

It does appear that the rent does not cover the mortgage interest and there has been hardly any capital gain, if that is the case there is no tax liability. Cannot see what the OP is going on about.

tonytsdiver

MrsSid78 wrote: »

Hi!

Is there anyway to avoid paying income tax in a second home? Can I take my name off the mortgage with husband and just have it on the other property? Then would have no capital gains when sell? Or is there anyway I can shift the "income" to something else. As I pay the mortgage out my salary technically I am being taxed twice!

I would so appreciate some advice!

Rachael. :money:

Become an MP ?

N79

MrsSid78 wrote: »

Hi!

Is there anyway to avoid paying income tax in a second home? Can I take my name off the mortgage with husband and just have it on the other property? Then would have no capital gains when sell? Or is there anyway I can shift the "income" to something else. As I pay the mortgage out my salary technically I am being taxed twice! Can't believe it (well I can with our government actually)

I would so appreciate some advice!

Rachael. :money:

Capital gains is based on occupancy, not ownership, so that ruse wont work. Others have covered how to offset costs against income but ultimately you will pay tax on any profit unless.....

I don't normally post this sort of thing (edit: and I hope people will realise that this post is mostly tongue in cheek) but there is a way to not pay UK tax on rental profit in the UK.

Step one is to become non resident in a suitable overseas country (one with low tax rates)
Step two is to marry locally (or at least have children) so that you can shift your domicile (not essential, but makes everything easier).
Step three is to structure a set of companies so that the profit pops out in a company in the overseas country.

Bingo - no UK tax to pay. But on a downside you will not be able to visit the UK for more than 90 days a year, will not be able to use the NHS, will not be able to use UK state schools, will not be able to claim any UK benefits and will have no access to all the other services which your income tax pays for.

shortchanged_2

OP why have you got a second home? I take it was to make money?

Unfortunately you appear to be suffering from the downturn in the housing market. But then you have to take the rough with the smooth.

There are many people who can just afford to pay for 1 home and many who can't afford to buy at all. Therefore I'm afraid you should pay your dues like most people or sell up.

Batchy

Capital gains tax, is a profit made on the asset value increasing overtime, it only materialises when you have made a PROFIT effectively on the purchase price compared to the sale price... then take into account indexation, tax allowances 10k each partner if your married, so 20k.

At the moment, prices are not increasing, WHAT exactly are you worried about?

if your mortgage interest isnt being covered by rent, again, no tax, but you will still have to prepare a return!

Good luck!

Gwhiz

Typical newbie. Signs up, looks for free advice, gets it but does not like the answer, gets objectionable and ends with name calling.

All rather pathetic really.

LandyAndy

Gwhiz wrote: »

Typical newbie. Signs up, looks for free advice, gets it but does not like the answer, gets objectionable and ends with name calling.

All rather pathetic really.

Yep, joined yesterday and signed off 4 minutes before being given the advice on mortgage interest:rotfl:.

Doubt she'll be back today.

ILW

Probably hormonal.