Money from house sale

Oggy123

Hello, I'm good at saving but am a Tax biff.
I am selling my house and will need to put the money from it in the bank (I have a few accounts with different ones so will not exceed the safety limit) for a few months before hopefully buying a few houses to rent, will I be liable for Tax on that money?

Also I am getting to the point where I could do with some professional advice on what to do with the cash. The plan at the moment is to start buying rentals, I will need to look at how many, mortgage type and amount to take out, most efficient tax plan. What sort of advisor should I look for and how much do they charge? Any other advice on good places to find information on this subject would be greatly appreciated.

Thanks

anselld

Tax only on the interest earned. Rate depends on your other income.
If you are serious about BTL though you will need to learn about tax (amongst many other things) or get an accountant.

getmore4less

if getting into rentals without a clue,

Start with somewhere like the landlord zone, loads of info on the things to look out for and the pit falls.

Read up on yields.

00ec25

Oggy123 wrote: »

I am selling my house and will , will I be liable for Tax on that money?

if the house was your only or main residence then no, you will not be liable for tax (CGT) on that money - but of course any interest you earn on it whilst it is in the various bank accounts will be subject to income tax

can I ask what is your business plan for your BTL empire, you seem to be finding it from the sale of your main home so where are you going to live, or are you downsizing and putting the surplus down as deposits on the BTLs?

Oggy123

Thanks for the replies, really appreciated and gives me plenty to swot up on :j. The tax was my main worry as I only have a month or so until the money enters the bank.

I am currently in a subsidised rental courtesy of my job and should be for at least the next few years, I'm selling the house because I have been relocated. To be honest I don't have a business plan as such, I just want a relatively safe method of maintaining my moneys real value and maybe increasing it in the future and I think rentals might be the way to go. Are there any other methods of achieving the same aims without too much risk?

chrismac1

If there is one thing that many of my clients share, it is too much exposure to UK property, often in one part of the country. As an example, I have a client who owns a successful restaurant, lives in the house above and has a couple of rentals and no other savings to speak of.

Fine, but many things can derail the Lake District property market. Nationally, look at a chart of prices going back 100 years and after looking at that chart consider the phrase "safe as houses".

It takes 3 months to sell in a good market, over 18 in a poor one. There are massive buying and selling costs. On average, 50% of my clients with buy to lets (not furnished holiday lets which are better) are either losing money right now or close to it. And that is with record low interest rates.

Meanwhile the US stock market is up 25% since 31 October and showing signs of being in a strong bull phase of consistently rising prices. Yet Vodafone pays 5.3% dividends and other solid shares similar.

A UK index tracker held in a SIPP or ISA is a great place to start. Less than 0.5% charges per year and very tax-efficient. If the market turns sour it's gone within 3 seconds never mind 3 months.

xylophone

It might be best to take that professional advice?
I think it is unlikely that any professional adviser would tell you to put all your eggs in one basket - going into rentals as you propose would be just that?
Clearly you will wish to keep a proportion of your money in cash
- (presumably you do use your ISA allowance) - you might wish to look at a stocks and shares ISA as well.
A holding of N Sand I index linked might be an idea if/when these become available again.
Might you wish to consider contributing to your pension?
http://www.which.co.uk/money/tax/guides/choosing-a-financial-adviser/ifa-qualifications/
http://www.unbiased.co.uk/find-an-ifa-search?utm_source=google&utm_medium=cpc&utm_term=unbiased&utm_campaign=Brand&gclid=COuEqfvM4q4CFUsMtAodolj3WA

John_Pierpoint

If your job requires you to live in tied accommodation, you are allowed to own one rented out house that gets the tax privileges of a principle private residence.

Situation discussed here
http://www.taxationweb.co.uk/forum/tied-house-and-cgt-t35947.html

00ec25

Oggy123 wrote: »

I am currently in a subsidised rental courtesy of my job

John_Pierpoint wrote: »

If your job requires you to live in tied accommodation, you are allowed to own one rented out house that gets the tax privileges of a principle private residence.

Situation discussed here
http://www.taxationweb.co.uk/forum/tied-house-and-cgt-t35947.html

just as well you explained that extra bit !

as there is an element of subsidy in your current place I assume its status has been declared for Income Tax purposes and so you shopuld know already if it meets the JRA rules, if not
- the helpsheet 202 lists the types and reasons for JRA being exempt
- as a one liner the key bit (see HMRC HS283) is : "The job-related accommodation must be provided by another person under the terms of a contract that requires you to live in the property and carry on a particular trade"


do please check out that your current place falls within the job related rules otherwise the advice we have given that you are CGT exempt may not still apply as the question will be over "your intention to return" which will be influenced by the history of your ownership of it,

Oggy123

Awesome guys, thanks very much for your time :T

That has given me plenty to think about and research,I have cash ISAs topped up (obviously not a great earner) and try to find good interest rates on saving accounts but I know I'm losing out in real terms.

The advice on not putting my eggs in one basket is well made and I will need to consider other options. I have always been worried about following the stock market due to a lack of understanding and some preconcieved fears but I will have to look into it and the other great suggestions.