Tax implications on selling 2 houses

milly_3

Engaged couple living in separate homes [both owned outright] now find that there are tax implications on selling 2 properties to buy our first joint home together. Help required please. Do we sell both, get married, and move to new home. Or sell one home, move in together before getting married, then selling 2nd home before buying joint home!! Confused ...... we are!!!

Al_Mac

If you both have your house as your main residence there is no tax implication, if you were living together and renting the other out then there is.

So looks like no problem to me.

Good luck with the marriage.

:beer:

Al_Mac

Sorry a bit rude. Welcome to the chat forums Milly.:D

ksrao

Hi,
at the moment I am trying to sell my second house which was rented it out.I expect to make a small profit of 30000.I am a basic rate tax payer.Do I incur CGT and if so how much?I am confused.

divadee

ksrao wrote:

Hi,
at the moment I am trying to sell my second house which was rented it out.I expect to make a small profit of 30000.I am a basic rate tax payer.Do I incur CGT and if so how much?I am confused.

you will be liable for capital gains tax on second properties expecially with the amount of profit you are expecting have a look here for details on how much etc....

Bossyboots

milly wrote:

Engaged couple living in separate homes [both owned outright] now find that there are tax implications on selling 2 properties to buy our first joint home together. Help required please. Do we sell both, get married, and move to new home. Or sell one home, move in together before getting married, then selling 2nd home before buying joint home!! Confused ...... we are!!!

Can you explain what you think the tax implications are as I cannot think of any.

Al Mac is right based on what you have said so far.

ksrao

divadee wrote:

you will be liable for capital gains tax on second properties expecially with the amount of profit you are expecting have a look here for details on how much etc....

Yes,I agree but do I get the allowance (£8500) for this year as I have not used that allowance or do I have to pay for the whole profit I make? IR sheet is confusing or it was not clear to me.

divadee

ksrao wrote:

Yes,I agree but do I get the allowance (£8500) for this year as I have not used that allowance or do I have to pay for the whole profit I make? IR sheet is confusing or it was not clear to me.

you will get to keep your allowance so if you made 30k profit you will only pay cgt on £21.5K which i think (but dont quote me on this) is at 40%

slater14

divadee,

You've got me thinking now!!

Doesnt he have Taper Relief on CGT to take into account also?....My accountant does the messy things like this for me (lucky me!). I'm sure I got TR on at least one of the sales, but that could have been on a commercial property?

divadee

slater14 wrote:

divadee,

You've got me thinking now!!

Doesnt he have Taper Relief on CGT to take into account also?....My accountant does the messy things like this for me (lucky me!). I'm sure I got TR on at least one of the sales, but that could have been on a commercial property?

you could of got taper relief if you held the property for over 3 years. at 3 years you get 5% relief 4 years 10% and 5 years 15% etc....

have a look here for loads of info on taper relief

also if you trust your accountant im sure hes on the ball a whole lot better than me!!!

divadee

ksrao i have just found some more info out from my best mates hubby whos an accountant.

right is the property jointly owned? if it is you both have your 8500 allowance, so you can have 17k of profit before you pay tax.

If you have owned the property for more than 3 years you will be eligable for taper relief see above post to slater14 for the brackets.

you also have to take out all of you costs and leave just the pure profit. so for example you sell it for 200k you had a mortgage of 150k on it and your fees stamp duty, etstate agents, solicitors costs moving etc came to 20K your profit would be 30k

you would get 17k tax relief or 8k if you own it singlely. then you would have to pay basic rate tax on the profit, unless it takes you into the higher tax bracket with the profit, which you would then have to pay higher tax on it.

this only my opinion and should not be taken as professional advice. the best thing to be would be call the inland revenue and ask their advice, then you can tailor it to you. without knowing more there are to many ifs buts and maybes.