Discussion
Hi.
I have a 1 bedroom flat which was bought as a buy to let. The flat has pretty much doubled in value. With all the talk of a possible slow down / crash in the housing market, coupled with a slowdown in the US market & Gordon brown making noises about the uk housing market, im thinking about selling up.
can the wise men and ladies of ph offer any advice. Is it time to cut and run?
any input appreciated.
thanks
I have a 1 bedroom flat which was bought as a buy to let. The flat has pretty much doubled in value. With all the talk of a possible slow down / crash in the housing market, coupled with a slowdown in the US market & Gordon brown making noises about the uk housing market, im thinking about selling up.
can the wise men and ladies of ph offer any advice. Is it time to cut and run?
any input appreciated.
thanks
hi.
The flat was purchased in december 1999 and is in the centre of edinburgh.
Been reading about taper relief and if its ok, I have a few questions. From what i can work out, there are two types of taper relief. First, is business taper relief. The other is non business taper relief. It would appear that the taper relief for business assets is far more favourable than the non business taper relief. As the flat was a buy to let, could it be considered as a business asset and hence eligible for the more favourable business asset taper relief?
what, if anything, can be done to achieve the status of business asset relief?
many thanks.
The flat was purchased in december 1999 and is in the centre of edinburgh.
Been reading about taper relief and if its ok, I have a few questions. From what i can work out, there are two types of taper relief. First, is business taper relief. The other is non business taper relief. It would appear that the taper relief for business assets is far more favourable than the non business taper relief. As the flat was a buy to let, could it be considered as a business asset and hence eligible for the more favourable business asset taper relief?
what, if anything, can be done to achieve the status of business asset relief?
many thanks.
benzo said:
hi.
The flat was purchased in december 1999 and is in the centre of edinburgh.
Been reading about taper relief and if its ok, I have a few questions. From what i can work out, there are two types of taper relief. First, is business taper relief. The other is non business taper relief. It would appear that the taper relief for business assets is far more favourable than the non business taper relief. As the flat was a buy to let, could it be considered as a business asset and hence eligible for the more favourable business asset taper relief?
what, if anything, can be done to achieve the status of business asset relief?
many thanks.
The flat was purchased in december 1999 and is in the centre of edinburgh.
Been reading about taper relief and if its ok, I have a few questions. From what i can work out, there are two types of taper relief. First, is business taper relief. The other is non business taper relief. It would appear that the taper relief for business assets is far more favourable than the non business taper relief. As the flat was a buy to let, could it be considered as a business asset and hence eligible for the more favourable business asset taper relief?
what, if anything, can be done to achieve the status of business asset relief?
many thanks.
Its a non-business asset, even if you bought it with the intention of letting. A business asset is somehting like goodwill, fixtures & fittings of a shop etc etc.
Renting of residential property is not usually treated as a "business" activity (there are some exceptions to this). Therefore disposal of a rented property will not qualify for the more favourable Business Taper Relief rates.
Steviebee - hanging on to it TOO long might not be the best idea either
Then, you MIGHT be talking about something else.
Steviebee - hanging on to it TOO long might not be the best idea either
Then, you MIGHT be talking about something else.Why isn't it treated as a "business" - mine is!
If it isn't a business then what the hell is it? The only difference between me and British Land is a question of scale.
This smacks of the rubbish HMRC used to spout about increasing the mortgage on your main home to move out and turn it into a let-to-buy. They used to say that interest on the increase in the mortgage was not tax deductible
Now they have relented and recognised that the extra loan is not to buy the new property but to retain the existing one and therefore interest is tax deductible. Doesn't their website actually refer to this as a sale from yourself as domestic owner to yourself as "business owner"?
This random distinction between is and is not a business activity seems inconsistent except in its consistency to f
k us over
If it isn't a business then what the hell is it? The only difference between me and British Land is a question of scale.
This smacks of the rubbish HMRC used to spout about increasing the mortgage on your main home to move out and turn it into a let-to-buy. They used to say that interest on the increase in the mortgage was not tax deductible
Now they have relented and recognised that the extra loan is not to buy the new property but to retain the existing one and therefore interest is tax deductible. Doesn't their website actually refer to this as a sale from yourself as domestic owner to yourself as "business owner"?
This random distinction between is and is not a business activity seems inconsistent except in its consistency to f
k us overHistorical reasons.
The Revenue tend to relate "Business" to "Trading" - buying and selling, supply of services etc etc. Deriving income from the letting of land and buildings is looked on, by them, as "Investment Income" rather than "Trading Income" and is therefore taxed under different sorts of rules.
Although the Revenue officially abolished their "Schedular" system of taxation a couple of years ago, in actual fact, the old "Schedular" rules still apply - it's just that you are not supposed to refer to them any more.
Trading Income was always taxed under the Schedule D rules.
Rental Income was always taxed under the Schedule A rules.
The rules applicable to these schedules are still in place, even if the Schedules themselves have been abolished.
In many ways, there are lots of similarities between the tax treatment of income in Schedule A and Schedule D. However, there are some very important differences - particularly in the claiming of Capital Allowances and the tax relief available on losses. The rules for "Trading" activities are usually more generous and flexible.
Finally, to make matter even more complicated, there are situations where income dervied from properties WILL be treated as Schedule D type "Trading Income".
Income from Holiday Lets, Caravan Sites and Hotels/Guest House income, although derived from land and buildings, is always treated as normal "Trading Income" and taxed accordingly.
Similarly, trading business which derive a small amount of rent from its trading premises can treat the rental income as part of its normal trading activity. This situation can occur if a business lets out a small portion of an office/factory/ warehouse as a sideline element of its main trading activity.
It's all straightforward really
The Revenue tend to relate "Business" to "Trading" - buying and selling, supply of services etc etc. Deriving income from the letting of land and buildings is looked on, by them, as "Investment Income" rather than "Trading Income" and is therefore taxed under different sorts of rules.
Although the Revenue officially abolished their "Schedular" system of taxation a couple of years ago, in actual fact, the old "Schedular" rules still apply - it's just that you are not supposed to refer to them any more.
Trading Income was always taxed under the Schedule D rules.
Rental Income was always taxed under the Schedule A rules.
The rules applicable to these schedules are still in place, even if the Schedules themselves have been abolished.
In many ways, there are lots of similarities between the tax treatment of income in Schedule A and Schedule D. However, there are some very important differences - particularly in the claiming of Capital Allowances and the tax relief available on losses. The rules for "Trading" activities are usually more generous and flexible.
Finally, to make matter even more complicated, there are situations where income dervied from properties WILL be treated as Schedule D type "Trading Income".
Income from Holiday Lets, Caravan Sites and Hotels/Guest House income, although derived from land and buildings, is always treated as normal "Trading Income" and taxed accordingly.
Similarly, trading business which derive a small amount of rent from its trading premises can treat the rental income as part of its normal trading activity. This situation can occur if a business lets out a small portion of an office/factory/ warehouse as a sideline element of its main trading activity.
It's all straightforward really
Edited by Eric Mc on Wednesday 6th December 11:10
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