Moving into my Buy to Let

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Moving into my Buy to Let

    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 I still be liable to pay CGT when I sell even though it has become my Primary residence?
    Thank You

    #2
    Yeah, for the gains for the time it was a rental.

    You might also want to look into stamp duty.

    Comment


      #3
      Do you know what CGT rules will be when you sell?
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        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?
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          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 to Let lender is.

          Comment


            #6
            How do politicians get away with paying no CGT on their second residences?

            Comment


              #7
              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, if you have a nice home in Sheffield and a flat in London I know which one I'd want the CGT to be based on.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by flexy View Post
                How do politicians get away with paying no CGT on their second residences?
                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 be 3 years. Letting relief will also go, although that will only affect you if your btl was your home previously.

                You also have your normal CGT allowance and if jointly owned two people's CGT allowances.

                If you plan to sell soon see if you can desinate your btl as your primary residence for this year -dont think you can if you've had the btl more than 2 years but I'm not up to date on current CGT rules.

                Comment


                  #9
                  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

                  Comment


                    #10
                    I read something about them (politicians) declaring their 'london flat' as a primary residence because they went there during weekdays, then their family home as a primary residence at the weekend.. or something...?

                    So, if planning to sell rental (after say 8 years or so being rented), you could feasibly stay there at weekends for a period of time (how long is required?), then sell and avoid CGT?

                    Comment


                      #11
                      The planning to exit being a LL (following removal of S21) is starting!

                      Comment


                        #12
                        Originally posted by flexy View Post
                        I read something about them (politicians) declaring their 'london flat' as a primary residence because they went there during weekdays, then their family home as a primary residence at the weekend.. or something...?

                        So, if planning to sell rental (after say 8 years or so being rented), you could feasibly stay there at weekends for a period of time (how long is required?), then sell and avoid CGT?
                        Politicians (and everyone else) can only have one primary residence, and they don't get to have a different one at weekends.

                        CGT isn't applicable for a primary residence, but it simply transfers to the other property you're not living in.

                        If you were to move in part time, you could nominate your BTL property as your primary residence by informing HMRC and any gain would be non-taxable for that period only (plus nine months, so there is some benefit), but you can't do anything with the gain already accrued.

                        When you sell it, your other property would become your primary residence and the gain would revert to being non-taxable.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          If you move into the BTL property and it becomes your primary residence, and you sell after 2 years , your situation is

                          Property owned for 10 years and if your total capital gain is say £100K .

                          The total gain is apportioned £80K ( 8 Years as BTL) and £20K ( 2 years as residence ).

                          So the BTL gain of £80K is taxable at 18% or 28% ,

                          and the Residence gain of £20K is exempt for cgt..

                          Comment


                            #14
                            Ok hadn't realised that it's split in this way. Hardly worth doing then... In my instance anyway.
                            £50k gain spread over two people's CGT allowance. It would be quite a pain to temporarily move!

                            Comment


                              #15
                              If each person has £25K capital gain, approx £12K annual allowance can be deducted .

                              So taxable gain is on £13K, charged at 18% or 28%. ( = £2300 or £3640 )

                              If you moved in to live for 2 years , your capital gain is reduced from £25K to £20K

                              and your saving on tax = £5K @18%/28% = £900 /£1400. - Yes , agree hardly worth doing.

                              Comment

                              Latest Activity

                              Collapse

                              • Deed of trust to Ltd company
                                Vinkris
                                Hello All,

                                I’m new to this site/forum so apologies in advance if this question has been asked before.
                                i own my current property 100% and it’s on a personal mortgage. Now I want to move from the property due to personal reasons and want to let it out. I want to do BTL via company...
                                20-05-2019, 17:11 PM
                              • Reply to Deed of trust to Ltd company
                                Gordon999
                                If you don't want to break the existing mortgage loan, then you certainly cannot move to a new BTL mortgage....
                                24-05-2019, 12:15 PM
                              • Capital gains tax and tax credits
                                alice123
                                hi i have recently sold a rental property and have been working out my tax liability for the GCT which works out at 2,500 tax to pay and im a non tax payer and this just takes me over the threshold - ok for tax credits pruposed do i need to declare the captial gain as its a capital gain and not income...
                                17-05-2019, 14:29 PM
                              • Reply to Capital gains tax and tax credits
                                Gordon999
                                For any owner occupied property ( and never rented out ) , there is no tax to pay on the capital gain.
                                24-05-2019, 12:05 PM
                              • Question Re the 3% BTL SDLT Premium
                                jghomer
                                Hi All

                                Both myself and my wife each have a number of BTL props in our sole names.

                                We also jointly own our marital home.

                                We want to move house to something bigger, and have been advised that the 3% SDLT Penalty will sting us on the new purchase even though it is...
                                22-05-2019, 18:14 PM
                              • Reply to Question Re the 3% BTL SDLT Premium
                                Gordon999
                                If you buy a new home before you have sold the present home, you should expect to pay the extra 3% sdlt.

                                But current rules, you are given 36 months grace period to sell the old home and claim back the extra 3% paid on the new home
                                24-05-2019, 11:59 AM
                              • Higher tax bracket
                                someonenew
                                I will be a brand new landlord soon and wasn't sure if what I'm doing is correct (best for tax reasons)

                                I have two properties

                                1) Bought Feb 2017 (£185,000 24% equity) residential for me to live in
                                2) Bought May 2019 (£150,000 25% equity) buy to let

                                The...
                                21-05-2019, 15:10 PM
                              • Reply to Higher tax bracket
                                Gordon999
                                At present , you have one residential property which is your home and no rental income to report.

                                You have just bought a BTL in May 2019 ( this month) so you will be reporting the rental profit ( 2019-2020 ) some time during April - Oct next year . Submit a tax return your self or...
                                24-05-2019, 11:52 AM
                              • Reply to Higher tax bracket
                                someonenew
                                Thanks for the info guys. I guess speaking with an accountant is the next step. Have any of you used anyone from Manchester that you would recommend?
                                23-05-2019, 11:04 AM
                              • Reply to Question Re the 3% BTL SDLT Premium
                                jghomer
                                Thanks. Yes we are selling our main residence and buying another. So that's good news, thank you.
                                23-05-2019, 10:29 AM
                              Working...
                              X