Help! Paying for a house i'll never living in again.

antrobus

Fuzzyness wrote: »

sorry to hijack the thread but what are the implications if you dont do this i.e. let HMRC make the election for you?

You lose the element of choice. HMRC will decide on the basis of the facts.

Of course, this does not apply to the OP - if you own more than one property you can choose which one is your primary residence for tax purposes, but you do have to be actually living in the properties concerned. If it's rented out, you ain't livin' in it, so it don't apply.

antrobus

kingstreet wrote: »

OP - are you an owner-occupier as well?

If so, what's the rate for the mortgage on the let and what's the rate on the mortgage on your residence?

You should concentrate overpayments on the place you reside in, as reducing the mortgage on the let is reducing the amount of interest relief you can offset against the rental income. This may not work so well if there's a disparity in the two mortgage rates, so let us know.

And it'll also depend on what tax rate the OP paying. If they're a higher rate taxpayer, even if they're paying 5% on a BTL, they would be better off stuffing spare cash into an ISA at 3.5%.

holly_hobby

The multi property owners election is particularly important where 1 or more of their properties are not let at the time of its disposal, but used as a private residence of the individual (albeit you may only have one main residence).

The original HMRC election (and noted main residence of the individual) may be amended/is reversable at a future date between properties owned (ie in this case if the OP moved back into the original propery and it ceased to be let) - with the flexible nature particularly useful for CGT planning for those who own 1 or more private residences (ie not let), and upon which they will have an undiluted (apart from annual CGT allowance) CGT liability on disposal - of course HMRC will want evidence that the nominated property on disposal was the individuals main residence (to prevent exploitation and fraudulent nomination under the facility, as you can see that prudent planning may be very advantageous to the asset owner).

It is such a case that if no election is made, HMRC will make the determination themselves, as to which residence they believe to be classed as primary, which may result in a large CGT bill on disposal of the determined non-primary dwelling, which by use of the election process may have otherwise been avoided or somewhat mitigated.

Which is why in such situations it is always prudent financial planning to ensure formal nomination is made within the permitted time frame.

Coming back to the OP, she has already made nomination and has advised that the property will be let for the duration of her ownership - so the above is general chat more than directed to the OPs situ.

Holly

Fuzzyness

holly_hobby wrote: »

The multi property owners election is particularly important where 1 or more of their properties are not let at the time of its disposal, but used as a private residence of the individual (albeit you may only have one main residence).

The original HMRC election (and noted main residence of the individual) may be amended/is reversable at a future date between properties owned (ie in this case if the OP moved back into the original propery and it ceased to be let) - with the flexible nature particularly useful for CGT planning for those who own 1 or more private residences (ie not let), and upon which they will have an undiluted (apart from annual CGT allowance) CGT liability on disposal - of course HMRC will want evidence that the nominated property on disposal was the individuals main residence (to prevent exploitation and fraudulent nomination under the facility, as you can see that prudent planning may be very advantageous to the asset owner).

It is such a case that if no election is made, HMRC will make the determination themselves, as to which residence they believe to be classed as primary, which may result in a large CGT bill on disposal of the determined non-primary dwelling, which by use of the election process may have otherwise been avoided or somewhat mitigated.

Which is why in such situations it is always prudent financial planning to ensure formal nomination is made within the permitted time frame.

Coming back to the OP, she has already made nomination and has advised that the property will be let for the duration of her ownership - so the above is general chat more than directed to the OPs situ.

Holly

thanks for the explanation and sorry to the OP for hijacking their thread.