Capital gains tax on property contents sold

Ed-1

If you sell some contents, e.g. ovens/sofas etc, together with a property (which are outside of the purchase price of the property and listed separately), is capital gains tax payable on these extras or only the gain on the purchase price of the property (assuming it's not a primary residence)?

sheramber

Do ovens, sofas etc increase in value with age?

Ed-1

sheramber said:

Do ovens, sofas etc increase in value with age?

No so I'm assuming capital gains tax would just be calculated on the property price.

Can you borrow more in a purchase mortgage application to pay for extras that are not part of the purchase price?

[Deleted User]

Ed-1 said:

sheramber said:

Do ovens, sofas etc increase in value with age?

No so I'm assuming capital gains tax would just be calculated on the property price.

Can you borrow more in a purchase mortgage application to pay for extras that are not part of the purchase price?

Capital gains will be paid on sale price less initial cost less cost of improvements less legal fees associated with purchase and sale.

You can borrow whatever the mortgage provider is prepared to lend to you on that property. If the property cost £150000, for example, it really makes no difference whether you borrow 90000 or 100000 so long as you meet their affordability tests.

jimmo

A freestanding oven, and a sofa are both Chattels and each one is exempt from CGT unless the sale price is more than £6,000.
 CG76573 - Chattels: exempt and chargeable gains: disposal consideration - HMRC internal manual - GOV.UK (www.gov.uk)

Jeremy535897

It used to be the case that people would deliberately allocate a significant proportion of the price of a property to fixtures and fittings to reduce stamp duty, although this practice was stopped many years ago in respect of fixtures like boilers and built in units. You can still sell free standing items like sofas separately, and if you manage to make a profit on a second hand sofa, that is an achievement in itself.

Ed-1

Jeremy535897 said:

It used to be the case that people would deliberately allocate a significant proportion of the price of a property to fixtures and fittings to reduce stamp duty, although this practice was stopped many years ago in respect of fixtures like boilers and built in units. You can still sell free standing items like sofas separately, and if you manage to make a profit on a second hand sofa, that is an achievement in itself.

Would you include such items as part of the property price for the mortgage application as the mortgage amount will be purchase price less deposit?

Jeremy535897

You have two choices as a buyer, if the vendor agrees: isolate the items concerned and pay (a reasonable price) for them separately, in which case they don't count as part of the property price for the mortgage application/stamp duty or part of the sale price if the vendor has a capital gains tax liability, or just pay a price for the property and get a few bits of furniture thrown in for free, in which case whatever is paid for the property is the figure used for mortgage, stamp duty and capital gains tax.

Ed-1

[Deleted User] said:

Ed-1 said:

sheramber said:

Do ovens, sofas etc increase in value with age?

No so I'm assuming capital gains tax would just be calculated on the property price.

Can you borrow more in a purchase mortgage application to pay for extras that are not part of the purchase price?

You can borrow whatever the mortgage provider is prepared to lend to you on that property. If the property cost £150000, for example, it really makes no difference whether you borrow 90000 or 100000 so long as you meet their affordability tests.

But are lenders OK with adding chattels to the mortgage on top of the borrowing to buy the property?

Jeremy535897

Ed-1 said:

purdyoaten2 said:

Ed-1 said:

sheramber said:

Do ovens, sofas etc increase in value with age?

No so I'm assuming capital gains tax would just be calculated on the property price.

Can you borrow more in a purchase mortgage application to pay for extras that are not part of the purchase price?

You can borrow whatever the mortgage provider is prepared to lend to you on that property. If the property cost £150000, for example, it really makes no difference whether you borrow 90000 or 100000 so long as you meet their affordability tests.

But are lenders OK with adding chattels to the mortgage on top of the borrowing to buy the property?

No, but most people don't seek to separate out a few trivial chattels. It really isn't going to make any difference whether you buy a house for £349,900 and an old sofa for £100, or buy a house for £350,000 with an old sofa thrown in, given the size of deposits required nowadays.