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Cash from renovation - please help:-)
fusar
Posts: 151 Forumite
Hello,
I bought my house without a mortgage a couple of years ago - after successfully renovating a couple of properties, which I still have and rent out. To cut a long story short, I have decided to purchase another property at auction that needs renovating and plan to purchase this at the beginning of February, and then sell it once modernised. In order to get the capital for this I have mortgaged my current property for £97,500. The house I am looking at is a terrace with a guide price of £50,000, however, I am sure that the price will increase to £60,000. If, for example, I purchase the property at £60K, I will have £37,500 left over (I plan only to spend £20k on the renovation). My question is.... where should I keep this money (£37,500) in the meantime, whilst renovating the property? In a normal bank account, if so will I be taxed on it? Could I invest the money elsewhere, maybe a high interest savings account ?
Any help would be really, really helpful!
Many thanks
Fusar
I bought my house without a mortgage a couple of years ago - after successfully renovating a couple of properties, which I still have and rent out. To cut a long story short, I have decided to purchase another property at auction that needs renovating and plan to purchase this at the beginning of February, and then sell it once modernised. In order to get the capital for this I have mortgaged my current property for £97,500. The house I am looking at is a terrace with a guide price of £50,000, however, I am sure that the price will increase to £60,000. If, for example, I purchase the property at £60K, I will have £37,500 left over (I plan only to spend £20k on the renovation). My question is.... where should I keep this money (£37,500) in the meantime, whilst renovating the property? In a normal bank account, if so will I be taxed on it? Could I invest the money elsewhere, maybe a high interest savings account ?
Any help would be really, really helpful!
Many thanks
Fusar
0
Comments
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have you looked at ING ? the web-based accounts are often higher interest rates than High St banks - as long as you have an account you can transfer money from ING into when you need it. The interest will be taxable depending on your other income. There is another money-based section "Savings and 'investments" on here where there may be more ideas.0
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In a normal bank account, if so will I be taxed on it? Could I invest the money elsewhere, maybe a high interest savings account ?
In both these accounts you will be taxed on the interest the money earns, not the money itself.
But I would be more concerned about possible tax on the profit you make from the sale of the house after you renovate it - that is if you don't either then live in it or rent it out.I believe the Revenue is paying quite close attention to these kind of property trading profits these days. But then perhaps you have already factored that into your calculations
Trying to keep it simple...
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its called Capital Gains Tax and can be 40% of your gain0
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