selling off BTL property

[Rob_T]

I am looking to sell a proportion of my BTL properties.

Both in Datchet, tenants have been in for a while, one is just extending for another year. Managed through reputable local agents.

Properties are 1 bed starter homes, total rent received is £1150 per month.

Combined value is £290k which is my asking price.

Any interest, please PM me.

[The Londoner]

Yields on B2L are not great are they! Hope you made some gain on your capital.

[Rob_T]

2.4 times in 8 years.

[M400 NBL]

With that sort of capital growth you're in for a hefty cgt bill. Have you undertaken any action to reduce your cgt bill... such as living in any of them, which allows you a PPR allowance of £40k.

I'ge got a btl not far away in Herschel Village which I will be moving into next year. By the time I sell I probably would have only made £40k-£50k but i'd still prefer not to pay any tax.

Btw, that's a very good rental income for 1 bed starter homes.

[Rob_T]

properties are in company name, so i doubt i could get away from paying CGT in the way you suggest!

[M400 NBL]

True, but taper relief is far better. 8 years ownership should make a significant dent in your cgt liability

As i've said to others, check out www.taxationweb/forum for similar circumstances, or register and find out for sure. It's worth a second opinion even if you have an accountant.

[wattsm666]

Just for the record - if the properties are in a company then the company is liable to CGT, using indexation. Once that gain has been calculated you are left with surplus funds in the company, which then need to be extracted and will be liable to further tax. Either taxed as a dividend or as a capital gains tax in the receipents hands, which is when the taper relief point comes into play. The assets are non-business assets, which is less favourable treatment than business assets.

Yes there is a double tax charge!

[Eric Mc]

I often wonder are there any advantages at all of owning rental properties through limited companies.

Companies which obtain most of their income from investments (rather than trading) pay Corporation Tax at higher rates too as they cannot avail of the special low CT rates applicable to "Small Trading Companies".

Rental income is deemed "investment" income , not "trading" income.

[Rob_T]

only reason i bought properties in ltd company was because at the time, the company was generating revenue elsewhere. therefore in my mind it was easier to buy the houses for 60k asking price as opposed to the effective 100k gross it would have cost me if i had bought them in my name.

[Eric Mc]

Posibly an effective ploy if the rental income has not been generating profits (as you will have been paying relatively high CT on any profits in the company). As has been stated already, the main tax disadvantages of company owned properties arise at the time of disposal.

[johnfm]

So, £290k buys a rental yield of £1150 pcm - what's that, 5.5% before any costs assuming 85% LTV. Some BTLS are not much of a return these days are they (excluding capital gain, of course)