Sold house moving to rental

STRAWB

We have recently sold our house and moved into rental as we do not want to rush in to buying again until our children have left home.

It was our only property and i just wanted to know if we have to be aware of any pitfalls with the money from our house sale or any other things we need to take into consideration with our lovely government! As i thought I read somewhere you have to buy again within 2 years.

Also we are self employed does this have to be included on our self assessment forms and if so how does this work.

Thanks in advance.

BitterAndTwisted

Buying again within two years possibly relates to the interest earned on the funds. Ditto declaring the interest on your self-assessment forms. The equity you have realised on the sale is not income, only the interest earned on it is.

I think......

FireWyrm

Last I looked, the capital gains was only applicable to amounts over your £10K per year threshold. If you're looking for somewhere nice and safe to keep that capital, I'd use a certain bullion vault and put it into solid gold. You should declare it when you sell your gold, if you can find the 'gold team' in HMRC to do so. Meanwhile, the money sits and accumulates and you don't have to worry about disappearing banks for the forseable future. If you're interested, read up on Bailment.

If you put your savings into a bank, be aware that BOA only guarantees £85K total per bank and banks can and do use depositors money when they go belly up. I would be looking for somewhere a little safer to put it.

vuvuzela

Keep in mind that the money may well be over the compensation limit if a bank goes under. Split any savings into tranches of £85K or under : http://www.fsa.gov.uk/library/communication/pr/2010/181.shtml

STRAWB

Cheers guys!
My main worries are is there a set time i have to buy a property again and is there any tax issues with the money other than interest earned on it?
Cheers!

FireWyrm

vuvuzela wrote: »

Keep in mind that the money may well be over the compensation limit if a bank goes under. Split any savings into tranches of £85K or under : http://www.fsa.gov.uk/library/communication/pr/2010/181.shtml

Thats per PARENT entity, not per bank branch remember. Don't bother putting tranches in NatWest and RBU for instance, they are the same entity. Also, you watch how quick that 'guarantee' disappears if more than one bank has a problem affecting more than a few thousand people at a time.

FireWyrm

STRAWB wrote: »

Cheers guys!
My main worries are is there a set time i have to buy a property again and is there any tax issues with the money other than interest earned on it?
Cheers!

Tax is either paid at source on money in a bank, or it is capital gains in the case of bullion holding. Neither is complicated to understand. The beauty of gold is that it is unlikely to lose value over the long term, but capital gains is 40% on gains over £10K per year. In a bank, the bank takes care of the interest tax which is reflected in a lower APR in reality. Since this is a sale of your principle or sole residence, you are perfectly entitled to sell and there are no further implications beyond what I have said.

pmlindyloo

FireWyrm wrote: »

Tax is either paid at source on money in a bank, or it is capital gains in the case of bullion holding. Neither is complicated to understand. The beauty of gold is that it is unlikely to lose value over the long term, but capital gains is 40% on gains over £10K per year. In a bank, the bank takes care of the interest tax which is reflected in a lower APR in reality. Since this is a sale of your principle or sole residence, you are perfectly entitled to sell and there are no further implications beyond what I have said.

I find your post complicated :rotfl:

franklee

Don't know where this 2 year idea comes from but certainly there is no time limit on when you buy again unless you are wanting to keep and port your current mortgage in which case the terms of that mortgage would apply. The other obvious point to watch is house prices, flat or falling fine, but if they rise not good, maybe someone was predicting rises within 2 years? Apart from that I'm baffled.

You would have to declare any income generated from from the sale proceeds in your tax return in the normal way for that income. Ditto capital gains on any investments you make with the sale proceeds. However if you are going to reply on the money to buy again then I'd suggest you assess the risk you are willing to take before investing anywhere.

As you are used to doing self assessment forms tax should be no problem for you. (The information about the bank taking care of the interest on tax isn't quite complete as that only applies to basic rate taxpayers. Savings interest normally has tax taken off at 20 per cent before you receive it. If you're a higher rate taxpayer, you'll owe tax on the difference. If you have a low income you may be able to claim tax back).

STRAWB

On the self assessment form you have to declare you sold your property and then claim Private Residency Relief is this something you have to do in person? Does this apply to me? and if so how do you go about it?
Thank you

franklee wrote: »

Don't know where this 2 year idea comes from but certainly there is no time limit on when you buy again unless you are wanting to keep and port your current mortgage in which case the terms of that mortgage would apply. The other obvious point to watch is house prices, flat or falling fine, but if they rise not good, maybe someone was predicting rises within 2 years? Apart from that I'm baffled.

You would have to declare any income generated from from the sale proceeds in your tax return in the normal way for that income. Ditto capital gains on any investments you make with the sale proceeds. However if you are going to reply on the money to buy again then I'd suggest you assess the risk you are willing to take before investing anywhere.

As you are used to doing self assessment forms tax should be no problem for you. (The information about the bank taking care of the interest on tax isn't quite complete as that only applies to basic rate taxpayers. Savings interest normally has tax taken off at 20 per cent before you receive it. If you're a higher rate taxpayer, you'll owe tax on the difference. If you have a low income you may be able to claim tax back).