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- it is exempt for the time you physically live in it as your main residence (plus the final 18 months of your ownership of it irrespective of whether you live there or not)
- it is liable for the period you do not live there (excl the final 18 months).
do some reading?
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet
Hi _ I have read that link, thanks - just wanted to check if I'd understood it correctly - so I were to move out to live with bf and rent, as long as I sold within 18 months of moving out I would not be liable for CGT? Or say I sold 24 months after moving out, I would be liable only for the first 6 months I'd moved out?
Thanks0 -
Hi _ I have read that link, thanks - just wanted to check if I'd understood it correctly - so I were to move out to live with bf and rent, as long as I sold within 18 months of moving out I would not be liable for CGT? Or say I sold 24 months after moving out, I would be liable only for the first 6 months I'd moved out?
Thanks
example 1: own it for 10 years, move out after 9 years, let it for final year until sold
PRR = 9 years occupation + final 18 months = 100% exempt
example 2: own 10 years, move out after 8 years, let for final 2 years. Gross gain on selling £100,000
PRR = 8 + 1.5 = 9.5years. PPR amount £100,000 x 9.5/10 = £95,000
LR = lower of
a) PRR (£95,000)
b) gain in the let period: 10 years - 9.5 = 0.5 years. £100,000 x0.5/10 = £5,000
c) £40,000 max allowed
lowest is b)
net taxable gain: Gross Gain - PRR - LR - personal allowance (if needed) 100k - 95 - 5 - (PA not needed) = ZERO
remember the calculation applies to each owner so where more than one owner the gain is split and each person does the calculation on their respective share of the gain so each gets their own element of PRR and LR plus personal allowance0 -
yes, although you'd also be able to claim letting relief which may cover those 6 months anyway. See example calculation, note it should use months not years but for simplicity I use years...
example 1: own it for 10 years, move out after 9 years, let it for final year until sold
PRR = 9 years occupation + final 18 months = 100% exempt
example 2: own 10 years, move out after 8 years, let for final 2 years. Gross gain on selling £100,000
PRR = 8 + 1.5 = 9.5years. PPR amount £100,000 x 9.5/10 = £95,000
LR = lower of
a) PRR (£95,000)
b) gain in the let period: 10 years - 9.5 = 0.5 years. £100,000 x0.5/10 = £5,000
c) £40,000 max allowed
lowest is b)
net taxable gain: Gross Gain - PRR - LR - personal allowance (if needed) 100k - 95 - 5 - (PA not needed) = ZERO
remember the calculation applies to each owner so where joint owners the gain is split and each person does the calculation on their respective share of the gain
Great, thank you.
I bought for £83k and valued at £125k. I only earn £20k per year. So for a short term solution to make sure me and bf like living together, and to see where careers go (his could take him to move to another part of the country in the next 2-5 years) this doesn't sound as bad a financial option as I feared learning of the new regulations. Thanks0 -
quotememiserable wrote: »You can go property another way, by investing with housecrowd or picking the property investments from thincats.
As a matter of interest - have you had personal experience of those 2 platforms?
ta0 -
Great, thank you.
I bought for £83k and valued at £125k. I only earn £20k per year. So for a short term solution to make sure me and bf like living together, and to see where careers go (his could take him to move to another part of the country in the next 2-5 years) this doesn't sound as bad a financial option as I feared learning of the new regulations. Thanks
The new regulations are designed to hit portfolio landlords who are over-leveraged, forcing them to sell so the government can say "Look at all the supply for FTB`s we have created", you should be fine.0 -
My mother in law has sold her dilapidated but valuable house in Oxford to move to a nursing home near us in Kent.
The cost of the home is £720 per week and with some £400k in the bank I was thinking of BTL in the Kent area.
With interests rates low and not willing to gamble on traditional investments we've been considering BTL.
We have LPA but will it be buying in her sole name. Any advice would be appreciated.0 -
We have LPA but will it be buying in her sole name. Any advice would be appreciated.
nursing home or care home???
average length of stay in a nursing home before death is <2 years
for a care home, her 400k will cover upwards of 10 years so as LPA holders how old is she and what is most prudent for HER money for what remains of her life - presumably as an LPA is in place and you are already administering it, her prognosis is relatively short?
Buying a property in a high cost part of the SE England and thus exposing her to the costs and risks of being a LL may not be deemed to be appropriate actions of her trustees given housing market uncertainty0 -
PAY for professional advice from a registered independent financial adviser, anything less leaves you wide open to not having taken proper care of your trustee duties
nursing home or care home???
average length of stay in a nursing home before death is <2 years
for a care home, her 400k will cover upwards of 10 years so as LPA holders how old is she and what is most prudent for HER money for what remains of her life - presumably as an LPA is in place and you are already administering it, her prognosis is relatively short?
Buying a property in a high cost part of the SE England and thus exposing her to the costs and risks of being a LL may not be deemed to be appropriate actions of her trustees given housing market uncertainty
Thanks, her total assets are about £750k so there is plenty of provision for a 93 year old in a CARE home!
I will seek the advice of a registered financial advisor but BTL I thought would be one way to reduce the impact of a £38k a year outgoing.0 -
My mother in law has sold her dilapidated but valuable house in Oxford to move to a nursing home near us in Kent.
The cost of the home is £720 per week and with some £400k in the bank I was thinking of BTL in the Kent area.
With interests rates low and not willing to gamble on traditional investments we've been considering BTL.
We have LPA but will it be buying in her sole name. Any advice would be appreciated.
Recently I was in a rent or sell dilemma in Oxford, ended up selling a 3 bed terrace for £600k rent could have been circa £2250 pcm0 -
Thanks, her total assets are about £750k so there is plenty of provision for a 93 year old in a CARE home!
I will seek the advice of a registered financial advisor but BTL I thought would be one way to reduce the impact of a £38k a year outgoing.0
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