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Capital Gains on a 2nd Property
mgbond
Posts: 86 Forumite
Hi,
I am now separated from my partner and she is staying in the main home (supported by me). I am now renting a property near by so It makes it easier to see my Son. I have a second property (flat) that I rent out.
At some point I want to sell the second property in order to buy my ex partner out of the main home and move back. If i make a certain amount of profit from selling the flat then I would normally have to pay capital gains tax on it. But i feel this is unfair when that profit is being used to settle a finical separation agreement and buy me back into my main home?
Is there away around this?
Thanks
Martin
I am now separated from my partner and she is staying in the main home (supported by me). I am now renting a property near by so It makes it easier to see my Son. I have a second property (flat) that I rent out.
At some point I want to sell the second property in order to buy my ex partner out of the main home and move back. If i make a certain amount of profit from selling the flat then I would normally have to pay capital gains tax on it. But i feel this is unfair when that profit is being used to settle a finical separation agreement and buy me back into my main home?
Is there away around this?
Thanks
Martin
6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West
22deg pitch East to west 12 panels on the East and 8 on the West
0
Comments
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No. It's an asset the sale of which is liable to CGT.
You could say that your salary is going towards the settlement, too, so shouldn't be subject to income tax...0 -
What about if I make the flat my main home for a while?6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West0 -
Then it would get primary residence relief for a proportion of the period.What about if I make the flat my main home for a while?
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2018#calculating-the-gain-where-only-partial-relief-is-due0 -
Would you save more money by moving into the flat you rent out and not paying rent yourself on another property?
Don't look at the headline rent, what is your net profit from your rental after voids, income tax, maintenance, fees etc and what do you pay in rental. You also have to calculate future savings on CGT from residential relief to get a true picture.
I would be surprised, if they were similar flats in a similar area, if it wasn't much more beneficial to move into your own flat and stop paying rent.0 -
Yes. I rent a house for less than I get rent from my flat (father in laws house so I get it half price) so it works out about the same. Plus it’s a house and close to my Son. Also when I buy the main house back they will both move into the house I rent so this way he is used to it.
I’m expecting to clear about 35k when selling the flat. I believe 12k I won’t pay tax on. I have lived in the flat so I suppose that remaining value of 23k should reduce due to the ratio of years I’ve lived and rented it for.6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West0 -
So out of 20yrs with the flat It would have been my main residence for 9 of them6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West0 -
Who is the type of person I need to talk to about this.6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West0 -
Alternatively search this board and the Cutting Tax board for worked examples of the CGT calculations. It comes up quite frequently so there should be some recent ones.0
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I suppose there are many types of accountant. I have someone that does my tax return for my rent but would they be an expert in capital gains? I will ask them. Thanks6kWp system, 20 x 300W Longi Solar panels with a Solis 6.0 inverter + Wifi and iBoost
22deg pitch East to west 12 panels on the East and 8 on the West0
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