Recovering CGT on sale of property

[MadLL]

Hello. I am considering selling a property that used to be my own home. After taking into account all that I can, I will have a CGT liability of approximately £35,000. I have read somewhere/was told that with careful planning/investment you can effectively recover the tax paid ie max out pension contributions to get a rebate. There was also some sort of investment vehicle that would allow you to get some sort of tax relief, I just can't remember the details. I know this is so vague but am wondering if anyone has any knowledge of such a thing?

Many thanks for your time and help

[Section20z]

You can defer your CGT by investing in EIS or SEIS shares, or just put it in your SIPP and claim most back.

[Gordon999]

Tax relief for reinvestment of gains in qualifying schemes is intended to stimulate investment in small businesses, and is incorporated into the enterprise investment scheme (EIS), as EIS deferral relief. This provides a ready supply of venture capital to growing businesses.

Deferral relief allows a UK resident investor to defer capital gains tax (CGT) on a chargeable gain arising from the disposal of any asset, or a gain previously deferred, by investing in new shares of a qualifying unquoted trading company.

The relevant definitions are set out in the EIS legislation. Most trades qualify, but there are a number of exceptions including but not limited to, banking, insurance and other financial activities, and those considered to be 'asset backed' (such as farming, forestry, property development, hotels and nursing homes).

Above extract copied from :

https://www.plummer-parsons.co.uk/ta...eferral-relief


Does the EIS legislation include residential property ?

[Gordon999]

here is the gov website on capital gains tax relief :


https://www.gov.uk/guidance/venture-...ins-tax-relief

[jpucng62]

Two things you can't avoid - death & taxes!

[MadLL]

Thank you for your responses. Does anyone have any thought on these EIS schemes, are they as safe as an investment in a rental property?. at least with a rental property you (hopefully) get rent every month and also capital growth - any thoughts?

thanks

[ifallelsefails]

Having read what Gordon999 posted, it sounds just like what you can get via Crowdcube. Most of the businesses seeking funding on Crowdcube are eligible on the EIS scheme and you get shares in these fledgling businesses. I was only interested in Crowdcube because a number of businesses that I know were trying to raise funds that way. Having recently looked into Crowdcube, if that is anything to go by, (just google about Crowdcube and look at the Q&As on Quora of people that have actually invested via it) then I can say No in answer to both of your questions.
Essentially, as Gordon999 quoted, you get shares in businesses that are just starting out. The issue as I have been reading is that most fail. Those that are successful take many years to get there. It is very unusual for you to get dividends because the business is growing, all profits are ploughed back into the business, so the only way that you get a return is by the business being bought out or by going public on the stock market. By the time that happens, the business has usually had to raise funding multiple times and your shares have then been diluted and are no longer worth what you originally purchased them for. Only a select few companies are successful enough to make it worthwhile it would seem. Apparently, as with the stocks, you have to spread your investments amongst multiple companies to mitigate the risks and be in it for the long haul.
So No, it is reckoned to be extremely high risk, more high risk than the stock market.

Funnily enough, all of this information on the deferment of CGT is available from Crowdcube: https://www.crowdcube.com/explore/investing/tax-relief
Just be extremely aware of the risk, do your research and speak to a professional first.

[ifallelsefails]

MadLL Whilst filling out the tax return, I noticed that you can offset trading loss against capital gains. Like all these things, it isn't straightforward - here is a guide: https://www.taxinsider.co.uk/trading...pital-gains-ta