In agony over selling or sticking with sole BTL

silvercar

I worked out last year that there would be no capital gain. This may well change after April.

One of us has our calculations wrong!

00ec25

GDB2222 wrote: »

The answer to your question is no. You’d still have a CGT liability.

what was the question? i missed it

OK I see the question now, and yes it is no

00ec25

silvercar wrote: »

Post April 2020, the figures become:

Lived in it for 4 yrs rented out for 12 yrs.
relief for 4 yrs ie 25%. ie 35k.
GT allowance of 12k, if not used elsewhere.
Leaving you with CGT on 93k at your marginal rate 18/ 28%.

So an extra (probably) 28% of 50k ie 14k.
.

you missed out the 9 months deemed occupancy

LR is abolished, but DO is still allowed, just at 9 not 18

getmore4less

Lots to read but no numbers

What's the actual letting business look like on yield(only counting interest on any debt).

AdrianC

mrsmumbles wrote: »

It is so hard as I suppose I am attached to the flat, wanted to leave it in the future as a family investment although no kids ourselves, and the tenant is great.

That kind of emotional attachment is never particularly compatible with letting - now imagine the tenant was awful...

I bough the flat for £155k

So £135k of capital growth across 15 years.

dimbo61

If the flat is still earning you a good income Why Sell ?
If you are retired and not a higher rate tax payer you will only pay 18% CGT on the increase in value
If you sell now you may pay 28% ?
Your BTL has increased in value by £9,000 a year for the last 15 years.
Some people have to live on that amount each year.
What would you do with the £100,000 profit from selling with some cash ISA,s paying 0.1% and the best paying 1.4/1.5% a year.
Yes it's a pain being a LL but I bet you £50 your rent is more than £1,500 a year ???

mrsmumbles

GAAAH! Well this is it. The tenant is nice and yet I also fear whether I could cope with a crap one if he moved out. And I have handled bad tenants before. I have emailed him asking him wha his plans are. He is very laid back so who knows? If he wanted another two or three years, I would be tempted. BUT: i agree that the flat, although it does and always has paid out once it reverted to base rate in 2011, may be best sold before CGT, lettings relief and all the other changes make a sale costlier. I am a basic rate taxpayer...can’t work full time and had Hammy Hammond just left us all the fleck alone, I had my pension plan. But now...Silvercar, I really appreciate your help! I need to give more numbers...the remaining debt on the mortgage is £122 k, so if it sold for around the £299k mark, that would be a whopping gain. The stamp duty back in 2004 was about 1500k and there was a land tax too. Also, in a loony stressed effort to have it all looking really good for a sale, i have..er...built a big garden office with certificated mains wiring. Wonder if I could claim on that with HMRC as a deduction off the CGT?
So i thought with my basic taxpayer rate, lettings relief and the 48 months of residency, it came to nil when I did the sum last Spring. But Maths is not my strong point. Help!

Starting to get stressed now as the gardens would be a faff to maintain long distance, but if I sell it now and start off an S21, I could sell far below market value (cannot do this as need as big a pension wadge as possible) and/or lose my tenant. Bah humbug.

Slithery

mrsmumbles wrote: »

the remaining debt on the mortgage is £122 k, so if it sold for around the £299k mark, that would be a whopping gain.

The amount of your mortgage has no impact on the CGT calculations. The gain is based purely on purchase price and sale price.

i have..er...built a big garden office with certificated mains wiring. Wonder if I could claim on that with HMRC as a deduction off the CGT?

Nope.

mrsmumbles

The mortgage is £375 a month and rent is £1000 so yes it is a huge help to me as since heart surgery it is not going to be easy to remortgage.

It is bang on the average for the area...tenant has only had two rent rises since 2015.
For an utter newbie, i feel I have been a good landlord, but you never know...if he fought the notice to quit I would be in deep schtook. Might need to bribe him! He would get all the deposit back as he has been good. Not outstanding, but pretty darned good.

mrsmumbles

Any final thoughts gladly welcome. Please be gentle. I am going to crawl in a corner and email my accountant. Just keen to see how other BTL landlords squared it. Am aware I am a but too fond of the flat and it is time to let it go, but it will be a wrench. Then again, so is losing 40 plus grand.