Capital Gains Tax !

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  • columbo
    started a topic Capital Gains Tax !

    Capital Gains Tax !

    Ok you clever people , I could make this very long but I will try and keep it short , How do you no or find out if you have to pay this tax ? I have a few property,s and would like to sell the largest one but have been told if I'm not the payer of the bills I only have 18 months and then its not my main house and would be liable for 40% taxed on the profit ( which would be loads as we have had the house in our joint names for 23 years ( moved out 2 years ago ) I no its not black and white and for some strange reason no one seems to no the truth on this high property tax , Thank you for reading this and any fed back would be great .

  • jpkeates
    replied
    If the property never rented, it never became part of a property investment business, so the property never become an investment.
    The rules in second property sales are fairly simple, and the actual answer will depend on where you actually lived and what, if anything, you told HMRC (about which was your main home for example).

    Leave a comment:


  • Gordon999
    replied
    If you have lived in the property for 21 years out of 23 years , the tax office will give exemption to capital gains tax for 21 years + 18 months from date of moving out. So only the gain for last 6 months is taxable.

    If your capital gain over 23 years gives you £460,000 profit which is a gain of £20,000 per year. Your tax able gain for 6 months period is £10,000 . You have a capital gains allowance of £11,000 so there will be no tax to pay.

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  • columbo
    replied
    Thank you .

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  • AndrewDod
    replied
    Then your CGT bill will almost certainly be zero.

    Unless it is an extremely expensive property and increased in value by at least a million or so (given two basic CGT exemptions) -- if that is the case you will need to look at precise numbers.

    Can you prove it was your only or designated main residence for all of that period (minus 2 years)?

    Leave a comment:


  • columbo
    replied
    Thanks for your replys , The house was our main living house until 2 years ago when we down sized ,we never rented the house out as tried to sell it but it fell threw a couple of times so no we never rented this house , Our tax records are all complete and up to date with the other propertys , We don't want to sell the house and then get a very lg CGT as you could imagine ,again thank you all for your valuable time .

    Leave a comment:


  • AndrewDod
    replied
    Paying of (utility) bills has nothing whatsoever to do with ownership with respect to Capital gains.

    If you lived there for 23 years and rented it out for 2 years, GCT would almost certainly be zero.

    But you seem not to have lived there - or did you????. The amount of time you "get" is zero -- not sure where the 18month idea comes from..... that is only applicable if it was your primary and only residence.

    It is (mostly) black and white.

    Yes I generally know the truth.

    You need to describe the thing exactly to get to that truth.

    Leave a comment:


  • leaseholder64
    replied
    Reading "no" as "know", and assuming you have copyright clearance.

    It is not a property tax; it might better be described as an investment tax. Also it is not 40%; the rate depends on your marginal rate of tax, and whether or not the gain is on residential property, but no rate is currently greater than 28%.

    The answer to the main question is that any investor is expected to keep proper records and submit proper tax returns. Given that, in London, most BtL landlords are aiming for a capital gain, all should have factored CGT in from the start of the business.

    The real question here is to the extent that you have exemption as the result of its being your main home. Whilst that exemption may still apply to you, it is not really intended for people with large portfolios. I think the aim is that it allows people to work away from home, or not sell their old home immediately, if selling proves difficult.

    Rather than try to summarise the rules and get them wrong, start here: https://www.gov.uk/tax-sell-home In particular I wonder if you actually bought as an investment, even though you lived in it, which might void the allowance.

    Leave a comment:


  • ash72
    replied
    I'm am assuming this property you are selling was previously rented out, and therefore was not your main residence, if this is the case you will be liable to CGT, the exception is only for your main residence, if you can prove you lived there prior to selling it you could then get the relief of CGT on this.

    Leave a comment:

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  • tax responsibility and allowable expenses
    pineapple11
    Hello, wondering if anyone can help.

    Firstly, my husband and I are joint owners of our rental property but I heard that we can change things so the tax is based on my income alone. Is this true? If so how can I go about arranging this. I earn alot less than my husband.

    Secondly,...
    23-04-2019, 20:58 PM
  • Reply to tax responsibility and allowable expenses
    Gordon999
    Q1. if you are given tax return SA211 2019 to complete , then read the section 6.1 ( property let jointly ) ,

    Q2. No, its too late. It only allowable if you had use the money raised from house to buy the property.
    24-04-2019, 11:57 AM
  • Reply to tax responsibility and allowable expenses
    jpkeates
    If you are the landlord and your husband isn't, the income would be yours.
    It becomes a little more complex if it's paid into a joint account.

    Essentially, tax is paid on beneficial income, so if your husband enjoys the results of the income, it's really his income as well.
    ...
    24-04-2019, 09:30 AM
  • Moving into my Buy to Let
    Veryvicky79
    I’m considering selling my primary residence and moving into my buy to let. I then will want to sell the buy to let in a couple of years time and then buy a new primary residence outright. Reason for this is to consolidate my assets and buy my next family home outright.
    My question is will...
    22-04-2019, 17:23 PM
  • Reply to Moving into my Buy to Let
    Gordon999
    The gain achieved during "primary residence period" is exempt for cgt. .

    The gain achieved during the BTL period is liable to cgt at 18% or 28%

    Primary residence can be claimed for the period in residence plus up to 9 months after moving out
    24-04-2019, 01:39 AM
  • Reply to Moving into my Buy to Let
    buzzard1994
    By taking full advantage of the tax relief for private residences and selling before they need to pay tax. You used to be able to designate whichever property you wanted as your main residence. The last 18 months of occupation is currently tax free - that is dropping to 9 months in 2020. It used to...
    23-04-2019, 21:49 PM
  • Reply to Moving into my Buy to Let
    jpkeates
    They don't actually avoid it, they do what anyone can do if they live in more than one place.
    You can nominate one of them to HMRC as your primary residence - because you're only allowed one property as your "primary" residence.

    While that costs you CGT on the other one,...
    23-04-2019, 11:54 AM
  • Reply to Moving into my Buy to Let
    flexy
    How do politicians get away with paying no CGT on their second residences?
    23-04-2019, 10:04 AM
  • Reply to Moving into my Buy to Let
    loanarranger
    jpkeates is correct however your lender might give consent to you occupying the property but place a bar on any release of equity from the property until either you have vacated the property again and can demonstrate this having been done or you have sold the property: much will depend on who your Buy...
    23-04-2019, 08:53 AM
  • Reply to Moving into my Buy to Let
    jpkeates
    The CGT is adjusted to allow for the period of residence (under current rules at least).

    Do you have a mortgage on the BTL property, because that would not allow you to live their without breaking the terms of the loan?
    23-04-2019, 08:43 AM
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