Capital Gains Tax - Property
Discussion
Not an expert, but in general:
Probably lots more people nearer to being experts on here...
- Your main residence is exempt
- You have to have linced there for a while for it to qualify (if you have 2+ properties)
- I would presume that developers get some kind of tax relief (as they do for SDLT)
- If its in conjunction with inheritance tax, that's all taken care of as part of IHT
- If part of IHT, any difference between the estimated price for IHT purposes and the actual selling price has to be dealt with (as an extra charge or refund)
Probably lots more people nearer to being experts on here...
pdV6 said:
Not an expert, but in general:
- Your main residence is exempt
- You have to have linced there for a while for it to qualify (if you have 2+ properties)
- I would presume that developers get some kind of tax relief (as they do for SDLT)
- If its in conjunction with inheritance tax, that's all taken care of as part of IHT
- If part of IHT, any difference between the estimated price for IHT purposes and the actual selling price has to be dealt with (as an extra charge or refund)
Probably lots more people nearer to being experts on here...
Hmmmm....... Basically I'm renting my house out..Have been for 2 years now. I'm having difficulty getting a normal mortgage(I have to re-mortgage due to discount period ending), for various reasons, so the only avenue open to me is a buy to let moprtgage. However, when I decide to sell the property, as It's on a buy-to-let mortgage, I'm worried that any equity made would be subject to capital gains tax. It's my only house, and I'm renting it as I've moved in with the g/f....any help would be a bonus!!
Many thanks.
pdV6 said:"Lincing" - what a wonderful word! I lince, you lince, he, she or it linces, we lince, you lince, they lince........ "To have your fingers over-rule your brain when blogging, e-mailing and fora-trolling...."
- You have to have linced there for a while for it to qualify (if you have 2+ properties)
Is that similar to Mincing?D'oh! *ahem* "lived" is what my brain said. No idea what my fingers made of it...
Do you think if we started using it now, we could get it in the OED by 2010?
chilli said:
Hmmmm....... Basically I'm renting my house out..Have been for 2 years now. I'm having difficulty getting a normal mortgage(I have to re-mortgage due to discount period ending), for various reasons, so the only avenue open to me is a buy to let moprtgage. However, when I decide to sell the property, as It's on a buy-to-let mortgage, I'm worried that any equity made would be subject to capital gains tax. It's my only house, and I'm renting it as I've moved in with the g/f....any help would be a bonus!!
Many thanks.
If its your only property and you are going to live in it, HMCE will consider it to be your main residence and so you'll not be subject to CGT on any equity.
The "buy to let" mortgage is simply a mortgage deal and that's between you and your lender; nothing to do with HMCE.
You might find, though, that your lender has certain expectations of the property's use built into the smallprint - I'd check those thoroughly before signing up.
pdV6 said:
Hmmmm....... Basically I'm renting my house out..Have been for 2 years now. I'm having difficulty getting a normal mortgage(I have to re-mortgage due to discount period ending), for various reasons, so the only avenue open to me is a buy to let moprtgage. However, when I decide to sell the property, as It's on a buy-to-let mortgage, I'm worried that any equity made would be subject to capital gains tax. It's my only house, and I'm renting it as I've moved in with the g/f....any help would be a bonus!!
Many thanks.
If its your only property and you are going to live in it, HMCE will consider it to be your main residence and so you'll not be subject to CGT on any equity.
The "buy to let" mortgage is simply a mortgage deal and that's between you and your lender; nothing to do with HMCE.
See, this is the interesting bit...It is my only property, but I have no intention of living there. Would sell it, but there are loads on the market just like mine, and they're not shifting.
You might find, though, that your lender has certain expectations of the property's use built into the smallprint - I'd check those thoroughly before signing up.
Ah - mis-read that bit; I thought you and GF were moving into the new house together.
As its your only property you'll be ok; the thing about living in it is only for when you have 2+ properties and want to "nominate" one as your main residence as a way of reducing CGT (i.e. you tell HMCE that the one with the largest CGT exposure is your "main" residence) - they may ask you to prove that that's the one you've been living in for a while. If you only own 1 property none of this applies and you're ok.
As its your only property you'll be ok; the thing about living in it is only for when you have 2+ properties and want to "nominate" one as your main residence as a way of reducing CGT (i.e. you tell HMCE that the one with the largest CGT exposure is your "main" residence) - they may ask you to prove that that's the one you've been living in for a while. If you only own 1 property none of this applies and you're ok.
Have you told your lender that you're renting it ??
I was under the impression that you couldn't have a "normal" mortgage on a property you rented out. It would be worth checking the small print
Where does your post go, and where are you registered to vote. If it's at your other half's then I think that would count as your primary residence
As for CGT as you have lived there (I assume you did once) then the last 3 years are ignored, anyhting over and above that you pay CGT on the percentage that it was rented. So if you are going to sell it, soon would be a good idea
I was under the impression that you couldn't have a "normal" mortgage on a property you rented out. It would be worth checking the small print
Where does your post go, and where are you registered to vote. If it's at your other half's then I think that would count as your primary residence
As for CGT as you have lived there (I assume you did once) then the last 3 years are ignored, anyhting over and above that you pay CGT on the percentage that it was rented. So if you are going to sell it, soon would be a good idea
pdV6 said:
Ah - mis-read that bit; I thought you and GF were moving into the new house together.
As its your only property you'll be ok; the thing about living in it is only for when you have 2+ properties and want to "nominate" one as your main residence as a way of reducing CGT (i.e. you tell HMCE that the one with the largest CGT exposure is your "main" residence) - they may ask you to prove that that's the one you've been living in for a while. If you only own 1 property none of this applies and you're ok.
Excellent, so as long as it remains my ONLY property...I'll be ok.
Thanks v much for your help, I really appreciate it.
Cheers.
Yes, actually it looks a bit more complicated:
www.hmrc.gov.uk/helpsheets/ir283.pdf (see "Letting Relief" on p3)
I still reckon the net end result would be ok as presumably you're not part-owning the GF's place?
Not sure what the tax implications of living rent-free at the GF's would be though.
www.hmrc.gov.uk/helpsheets/ir283.pdf (see "Letting Relief" on p3)
I still reckon the net end result would be ok as presumably you're not part-owning the GF's place?
Not sure what the tax implications of living rent-free at the GF's would be though.
Yep, if you are renting the property you are living in the peoperty you officially own may not be eligible to be classified as your Principal Private Residence and thus might be subject to CGT.
Also, "equity" has nothing to do with the CGT calculation. CGT is calculated on the gain made where the proceeds on sale exceed the original purchase price. The balance remaining on any borrowings is not taken into account in any way.
Also, "equity" has nothing to do with the CGT calculation. CGT is calculated on the gain made where the proceeds on sale exceed the original purchase price. The balance remaining on any borrowings is not taken into account in any way.
Eric Mc said:
Yep, if you are renting the property you are living in the peoperty you officially own may not be eligible to be classified as your Principal Private Residence and thus might be subject to CGT.
Also, "equity" has nothing to do with the CGT calculation. CGT is calculated on the gain made where the proceeds on sale exceed the original purchase price. The balance remaining on any borrowings is not taken into account in any way.
Ah, but I'm not renting the house I'm living in....It's onwed by the gf. As far as anyone "official" is concerned, I live with my parents.
Eric Mc said:
Also, "equity" has nothing to do with the CGT calculation. CGT is calculated on the gain made where the proceeds on sale exceed the original purchase price. The balance remaining on any borrowings is not taken into account in any way.
:sheepish: My fault for using that word - I know its not correct but couldn't think of a snappy one-worder that encompassed "difference in selling price to original purchase price"
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