Tax situation on money I paid for deposit

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    Tax situation on money I paid for deposit

    Hi, I bought a BTL flat in 2008 and wanted to recoup the deposit I paid on this (approx £25000). It is in joint names but the deposit was paid by me only. I wanted to take back that money and wondered how to list this in the SA tax return. If anyone can advise me i would be really grateful. Thanks

    How is the money being "taken back"?
    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).


      The SA Tax return is for reporting rental income and rental expenses. The £25K deposit is not reported in the SATR .

      The £25K deposit is treated like a second mortgage loan at Nil interest . So if the property costs £100K , the 1st mortgage lender provides £75K loan and you provide the £25K second loan.

      If the property is registered in joint names ( A + B ) with 50% interest each and later sold for £160K giving £60K profit.

      The conveyancing solicitor ( for sellers ) should issue a completion statement" showing :
      £75K repaid to 1st mortgage lender ,
      £25K ( 2nd Loan ) + £30K ( 50% profit ) due to A
      £30K ( 50% profit ) due to B.

      After sale of the property, the capital gains tax return submitted by each joint owner will show £80K sale proceeds less £50K ( original cost) = £30K ( capital gain ).


        Thank you for your replies. It's hard to get yr head around!! but i think ive got it.

        I am hoping to take some of this deposit back now as monthly repayments (as the flat was bought in 2008 and i need some of the money now). So I think I am ok doing this, so long as, on the sale of the property, i pay back the amount I am now taking back into the account.


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