Tax Deliberation

artih

I have two properties, the one I live in (Scotland) and one I let in England which is geographically distant. The one in Scotland is in a beautiful home and location overlooking the river and convenient for everything. However, my neighbour is a nightmare and will not contribute to common repairs and the roof is deteriorating rapidly. 

I have had an offer accepted on a new property. Nearer to my current home. I need to sell a property to pay for it. Should I sell my current property with no Capital Gains Tax keep it and let it or sell the let English property and pay CGT. If I do rent my current property, how does this affect tax going forward. Does CGT in future start from the date I start letting it or from when I purchased it? Any words of wisdom would be most appreciated.
i do not have a mortgage and will not have one on new property. I recently retired.

anselld

Dont let the tax tail wag the dog.

CGT is from when you purchase to when you sell but it is discounted in proportion to the time you lived in it (in months) plus the final nine months regardless if you lived there.

p00hsticks

not sure of the rules in Scotland, but in England if you sold the rental property rather than the one that is currently your main residence you'd also end up paying the additional SDLT on the new purchase as well as CGT on the sale .

theartfullodger

artih said:

I have two properties..... Does CGT in future start from the date I start letting it or from when I purchased it? Any words of wisdom would be most appreciated.

i do not have a mortgage and will not have one on new property. I recently retired.

Depends what CGT rules are WHEN YOU SELL not what they are now.  Obviously any answer given now will just be a guess..  Mortgage or not (currently) irrelevant.

Used to have 3 houses BTL in Scotland 500+ miles away each way, 10 hour drive each way.  It can be done, especially if landlord very flexible and helpful to tenants... But sometimes you have to go there, get an hotel room, reality. Retired like you so more flexible with time .

In my opinion landlording a job  can more easily be done in old age. I started aged 53, still am aged 77.

user1977

p00hsticks said:

not sure of the rules in Scotland, but in England if you sold the rental property rather than the one that is currently your main residence you'd also end up paying the additional SDLT on the new purchase as well as CGT on the sale .

Yes, 8% Additional Dwelling Supplement on the LBTT unless you are replacing your main residence (in this case, selling the Scottish property).