Avoiding capital gains tax on second property.

brit1234

kk20 wrote: »

You do realise that BTL pay taxes on their profits dont you?

But at same time offseting interest payments on the mortgage against tax on rental income, along with other expenses such as agents' fees and maintenance costs.

:mad:

dotchas

Tax avoidance is legal
Tax evasion is not

I guess no-one on this thread has ever done anything the least bit dodgy.............

Wee_Willy_Harris

dotchas wrote: »

Tax avoidance is legal
Tax evasion is not

I guess no-one on this thread has ever done anything the least bit dodgy.............

I think we were looking at it from a moral stance.

Yorkie1

None of which helps the OP who just wanted a straightforward answer to the questions.

OP, you may get a more helpful response on the Cutting Tax board.

anselld

Helen36 wrote: »

Wow! I wish I'd never asked! For your information, I lived in my flat for years before I met my husband. I'm now renting out my flat to a single mum, who doesn't work at all. I know many private landlords won't touch people who live off benefits, but she seemed like a lovely girl and I thought she and her children should have the chance of a nice home. And despite things being tough for us, I haven't put her rent up since she moved in five years ago, because I know things are probably equally hard for her.

But yes, I'm probably evil through and through for working extremely hard all my working life and using my money wisely and hoping to get a return for it.

And on that happy note, I'll leave this debate. Thanks for your advice.

Ignore the rantings of so-called first time buyer. Must be the longest first time buy in history. :-)

If you have lived in the flat for years you are unlikely to be due any CGT.

For starters all of the time you lived there is not liable.

The next three years after you stopped living there are also not liable.

The first 40,000 is not liable through private letting relief.

There is 10,600 nil tax band for CGT.

If you are married you can make use of spouse 10,600 nil tax band.

You can offset legal costs, improvement costs, stamp duty, etc.

You are entitled to all this despite what the moralisers may think. Get a tax advisor to sort it out if you are not sure how.

hotpot1000

Im sorry nearly everyone's having a go Helen,

this subject was mentioned on moneybox live on radio 4 about 1-2 yrs ago, they said there were no actual time limits set down as to how long you live at the 2nd property after moving in to avoid CGT.

good luck to you

00ec25

hotpot1000 wrote: »

Im sorry nearly everyone's having a go Helen,

this subject was mentioned on moneybox live on radio 4 about 1-2 yrs ago, they said there were no actual time limits set down as to how long you live at the 2nd property after moving in to avoid CGT.

good luck to you

correct - there is no time limit - the test is one of the "quality" of the occupation - it really has to be your main home

BUT that said simply moving back in does not give you 100% exemtion for the entire time you owned it. the correct situation is as posted by anselld

when you come to sell what was once your main residence the total reliefs soon tot up and may indeed cancel out any liability but you may still be left with some tax to pay if you have had a really large gain

FTBFun

brit1234 wrote: »

But at same time offseting interest payments on the mortgage against tax on rental income, along with other expenses such as agents' fees and maintenance costs.

:mad:

Every business is allowed to offset interest charges and other expenses against income. A property business is no different.

OP - I deal with occasionally in my job and I suggest reading anselld and 00ec25 posts as they give you as much information as you need.

Whether this system should be allowed is a question for the Debate... board really.