Thank you for this, excellent video full of information. I was anxious about capital gains tax as I couldn't get my head around it and didn't understand how to calculate it especially that it's no longer my main residence. Now I feel a lot more comfortable doing the calculations and I'm glad the tax isn't going to be as bad as I assumed! Thanks!!
Excellent video. Thanks. Question, my flat was sold with all the furniture included in the price. Can I claim a discount on the value of the furniture?
Hi Carol, great question!! Technically the completion statement should show the furniture as purchased separately (and actually the buyer should have thought to ask for that too to reduce the stamp duty!), but you could probably argue a fair and reasonable value/apportionment as a deduction. Hope that helps!
Timely advice as we have just sold our second property. During our ownership the cottage was first let then lived in free by my daughter for 2 years and finally empty for 2 years till sold. We also had an abortive sale legal expense together with a costly lease extension. Will HMRC allow any of this to reduce our CGT liability?
Private residence relief is only available when it is the owner of the property using it as a home. This means that the you are not able to claim relief for the time your daughter lived there. Abortive legal fees are also not allowable, however you can claim for the costs related to the actual sale. The treatment of the lease will depend on the specific terms such as the length of the renewal. Maybe not the news you want but hope it’s helpful nonetheless 😊
@@INAccountancy Thanks Sarah. The lease extension cost £6025 in 2018 and extended lease from 57 years to 99 . Surely this would qualify as additional costs if not capital expenditure?
Thanks for the question! Mortgage interest payments and other finance costs cannot be deducted when calculating your capital gain. You are only able to deduct for expenses relating to the purchase and sale such as estate agent fees, stamp duty land tax and legal fees as well as any capital enhancements...
Hi there and thanks for your question :) When you transfer properties to a limited company this is a chargeable disposal at market value. You will be liable to pay capital gains tax on the gain arising for each property. The company will also have to pay Stamp Duty Land Tax for each purchase. The rates will depend on the value and will be subject to the additional 3% surcharge!! Now, if there is equity in the properties, you can create what's known as a DLA (Director Loan Account) in the company to the value of that equity (I'm assuming there aren't the cash reserves available for the company to actually buy the properties / equity from you)... this can be drawn back out free of income tax once there is cash available to do so, and also interest can be charged against the DLA, which can essentially make up for some of those charges mentioned above... Hopefully that helps and makes sense?
Thank you for this, excellent video full of information. I was anxious about capital gains tax as I couldn't get my head around it and didn't understand how to calculate it especially that it's no longer my main residence. Now I feel a lot more comfortable doing the calculations and I'm glad the tax isn't going to be as bad as I assumed! Thanks!!
HI there - glad you found it useful! Remember everything might change after the upcoming budget, so keep an eye out here for updates...
No capital gains tax on your 1st and only home that you live in? That was not mentioned
Excellent video. Thanks. Question, my flat was sold with all the furniture included in the price. Can I claim a discount on the value of the furniture?
Hi Carol, great question!! Technically the completion statement should show the furniture as purchased separately (and actually the buyer should have thought to ask for that too to reduce the stamp duty!), but you could probably argue a fair and reasonable value/apportionment as a deduction. Hope that helps!
Timely advice as we have just sold our second property. During our ownership the cottage was first let then lived in free by my daughter for 2 years and finally empty for 2 years till sold. We also had an abortive sale legal expense together with a costly lease extension. Will HMRC allow any of this to reduce our CGT liability?
Private residence relief is only available when it is the owner of the property using it as a home. This means that the you are not able to claim relief for the time your daughter lived there. Abortive legal fees are also not allowable, however you can claim for the costs related to the actual sale. The treatment of the lease will depend on the specific terms such as the length of the renewal.
Maybe not the news you want but hope it’s helpful nonetheless 😊
@@INAccountancy Thanks Sarah. The lease extension cost £6025 in 2018 and extended lease from 57 years to 99 . Surely this would qualify as additional costs if not capital expenditure?
When we sell our Holiday let property, can we deduct the interest only mortgage from our sale profits?
Thanks for the question! Mortgage interest payments and other finance costs cannot be deducted when calculating your capital gain.
You are only able to deduct for expenses relating to the purchase and sale such as estate agent fees, stamp duty land tax and legal fees as well as any capital enhancements...
I have 3 property on my name, I want to incorporate to Ltd company. What are the implications ? Is there best way to avoid paying capital gain now?! .
Hi there and thanks for your question :)
When you transfer properties to a limited company this is a chargeable disposal at market value. You will be liable to pay capital gains tax on the gain arising for each property.
The company will also have to pay Stamp Duty Land Tax for each purchase. The rates will depend on the value and will be subject to the additional 3% surcharge!!
Now, if there is equity in the properties, you can create what's known as a DLA (Director Loan Account) in the company to the value of that equity (I'm assuming there aren't the cash reserves available for the company to actually buy the properties / equity from you)... this can be drawn back out free of income tax once there is cash available to do so, and also interest can be charged against the DLA, which can essentially make up for some of those charges mentioned above...
Hopefully that helps and makes sense?
What if the gain (when added to your income) pushes you from being a 20% payer to a 40% payer?