Recovering CGT on sale of property

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  • ifallelsefails
    replied
    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

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  • ifallelsefails
    replied
    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.

    Leave a comment:


  • MadLL
    replied
    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

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  • jpucng62
    replied
    Two things you can't avoid - death & taxes!

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  • Gordon999
    replied
    here is the gov website on capital gains tax relief :


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

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  • Gordon999
    replied
    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 ?

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  • Section20z
    replied
    You can defer your CGT by investing in EIS or SEIS shares, or just put it in your SIPP and claim most back.

    Leave a comment:


  • MadLL
    started a topic Recovering CGT on sale of property

    Recovering CGT on sale of property

    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

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  • Reply to SDLT and first time buyers
    by jpkeates
    If the buyers are going to rent the property while they go to university, it may meet the criteria for Stamp Duty Relief but it may not.
    It would be unusual for siblings leaving university to be able to commit to cohabit in a particular place when they graduate.

    There's obviously...
    04-07-2022, 15:14 PM
  • SDLT and first time buyers
    by mpppen
    Hello again.

    Just wondering if someone can advise.

    If I sell a BTL to my children who do not own their own property, I understand that they'll get the stamp duty relief.... two questions then.

    If they're buying the £350,000 jointly, does the relief count for...
    03-07-2022, 21:52 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    Apart from anything else, if you are selling the property to the kids, you are getting cash and they have a 100% mortgage - and then they are not actually paying a mortgage on 100% of 350K you will be paying it -- it is not a classic GROB, but risks falling foul of GROB rules - so when you die, even...
    04-07-2022, 14:45 PM
  • Reply to SDLT and first time buyers
    by mpppen
    Thanks.

    Yes, the lender is happy to lend them 100% the purchase price so not gifting on our side. In essence, it's just removing it from our name into theirs as he is also our lender.

    It's unusual I appreciate but it's a private commercial lender - if that makes sense. His...
    04-07-2022, 13:55 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    A few other comments:

    Depending where you are HMRC is not going to believe "no increase in value over past two years". An estate agent assessment may not be worth much at all. If challenged and HMRC do their own assessment you may be paying tax on a 20% uplift of 350K = quite...
    04-07-2022, 13:45 PM
  • Reply to SDLT and first time buyers
    by mpppen
    Thanks both.

    The intent is for them to live there but they may want to rent it out while they go off to university. That's where I'm struggling as to whether the Stamp Duty relief applies or not.

    CGT wouldn't apply as the property hasn't increased in value significantly since...
    04-07-2022, 13:11 PM
  • Reply to SDLT and first time buyers
    by AndrewDod
    Capital gains tax?
    Who assessed market value?
    Are they actually paying for this?
    04-07-2022, 08:35 AM
  • Are letting agent fees(2 year lease,change of tenant) considered allowable expenses
    by ss112233
    This question is about allowable expenses for tax deduction.
    Are letting agent fees for a 24 month lease(with a 16 month break clause) after a change of tenant considered as revenue or capital expenditure?
    I use a cash basis for accounting. The fees were paid in two lump sums. One at the...
    03-07-2022, 13:26 PM
  • Reply to Are letting agent fees(2 year lease,change of tenant) considered allowable expenses
    by AndrewDod
    Absolutely northing at all to do with capital expenditure
    04-07-2022, 08:31 AM
  • Reply to SDLT and first time buyers
    by DoricPixie
    The relief is against the whole property purchase.

    Your children will only get the relief if they are FTB intending to occupy the property as their main residence. It is the intention that counts so if the intention is to pretend it's their main residence for a period of time because the...
    04-07-2022, 00:57 AM
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