How to avoid capital gains tax when selling a second property?

Well done OP for managing to get two properties and well done mattyg for building a collection of businesses. Ignore the jealous comments.

I believe you have to live in the property for 6 months as your main home to avoid cgt. But an accountant is good advice.
 
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FoxEye said:
The trouble is that whilst this person may be paid well, on the whole they aren't. Average wage for such a person down here is about £12k to £15k. That's taking home at most £1k after tax.

Just having a house to live in can and does take >50% of their net income if they don't qualify for a lot of benefits (being single with no children is a killer). After bills and other living expenses these people have no money left at all.

Instead of a room in a shared house costing £500 pm, we need affordable housing for people with low incomes. It should be basic but good enough not to be considered slum housing. Water tight, heated, lit, running water; not mouldy, damp, single room "studio" flats forming part of someone's "portfolio".

So where is a small place like that for £200/300 pm? Why doesn't it exist (anymore)? Why is the cheapest place to stay for a low earner over half his net income?
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A room in a shared house in cornwall costs £500 a month!?
 
Jono8 said:
A room in a shared house in cornwall costs £500 a month!?
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By and large, yes. You can just look in the papers, there's always single rooms being advertised for £500 pm.

A self-contained one room "studio" flat (microwave for cooking, hand basin for washing) costs £600 to £800.

If you can get on benefits tho, there are some very nice houses that the council will pay for you to live in. You have to have kids tho.
 
FoxEye said:
By and large, yes. You can just look in the papers, there's always single rooms being advertised for £500 pm.

A self-contained one room "studio" flat (microwave for cooking, hand basin for washing) costs £600 to £800.

If you can get on benefits tho, there are some very nice houses that the council will pay for you to live in. You have to have kids tho.
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Not saying you are wrong, but i find that very hard to believe. When i used to rent (only last year), my gf and i were paying £800 a month for a very nice one bedroom apartment with a balcony in a gated development with it's own private grounds near Woking, Surrey! This was a very nice , quite exclusive place with two bedroom places in the same building worth about £350,000+ to buy as well!

House prices are much, much cheaper in Cornwall (compared with London/South East) as well so i am surprised.
 
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rubberduck said:
Hey ho!

Looking for some generic advice w.r.t. selling a second property and avoiding the tax 'hit'... I don't want to 'evade' the tax but merely want to 'avoid' paying as much as possible... As we all do :)

Looking for 'perfectly legal' pointers on the subject. I would be interested in any strategy or scheme which is legal and will minimize the tax I have to pay.

Please no hate-monger posts in here..... If you don't have anything useful to contribute then don't post!
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Can you provide more details on the property. Have you lived in it. How long have you owned it and what is its change in value.

A friend sent me this which might help as I was looking into this recently

Www.theguardian.com/money/2014/feb/12/how-calculate-capital-gains-tax-sell-home
 
MrMoonX said:
If you're rich enough to have two houses, pony up and pay the tax that's due :rolleyes:

This is why people are selfish ****s and half the population can't afford housing
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I have to say I disagree - if you've managed to get together a couple of properties, then good for you. Minimising your tax burden is probably how the person was able to afford 2 houses in the first place.

Personally we're going to rent our second property as it seems daft to sell an asset. However, we will do everything we can to minimise the amount of tax we have to pay. What sensible person wouldn't?

As long as you're doing it legally I see no issue with it whatsoever.
 
Freefaller said:
However, we will do everything we can to minimise the amount of tax we have to pay. What sensible person wouldn't?
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I had the chance to dodge a large amount of stamp duty last year. I decided against dodging it because I want this country to have well-funded public services. The extra money would have been nice but I'd rather play to the spirit of the rules.

I realise that this isn't a popular view though.
 
The house next to me has been done up to a £1m property and the current owner is playing the "live in for 6 months to avoid tax" game (though I actually thought I heard him say a year). I'm seriously considering dobbing him in to be honest though, as he hasn't been there once, has left a POS car in the driveway with all its tyres flat, and left the front garden completely undone. It makes this part of the road look awful!
 
Amp34 said:
Still doesn't negate the fact that compared to average income it's vey expensive.:p
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Yeah it's still nearly 50% of take home earnings and that's without any bills factored in.

The whole argument is, should low paid workers need to spend 50% of their earnings to put a basic roof over their heads?

Shouldn't their be cheap and cheerful places for low-paid workers? Or are we, as a society, going to accept that low-paid = exploited by those above you?
 
Tunney said:
I had the chance to dodge a large amount of stamp duty last year. I decided against dodging it because I want this country to have well-funded public services. The extra money would have been nice but I'd rather play to the spirit of the rules.

I realise that this isn't a popular view though.
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Well good on you for having morals.
 
FoxEye said:
Yeah it's still nearly 50% of take home earnings and that's without any bills factored in.

The whole argument is, should low paid workers need to spend 50% of their earnings to put a basic roof over their heads?

Shouldn't their be cheap and cheerful places for low-paid workers? Or are we, as a society, going to accept that low-paid = exploited by those above you?
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http://www.zoopla.co.uk/to-rent/pro...esults_sort=lowest_price&search_source=refine

Loads of 2 bedroom ones for £500 or less. That is £250 each. Also, all the bills would then be halved. Fairly affordable, even on minimum wage.

I agree living on your own is expensive and less than ideal, but can you imagine how ****** we would be if everyone wanted to live alone? We would need individual houses/properties for everyone which would be completely unsustainable. To be honest living on your own is somewhat of a luxury.
 
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Tunney said:
I had the chance to dodge a large amount of stamp duty last year. I decided against dodging it because I want this country to have well-funded public services. The extra money would have been nice but I'd rather play to the spirit of the rules.

I realise that this isn't a popular view though.
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Good for you. :) I wouldn't argue against it at all - but if I had a legitimate way of minimising my tax burden I'd take it, but that's why the world is a wonderful diverse place, because everyone is different. :)
 
My mom has the problem of trying to pass on a house to me and my sister without losing most of the money in the process. If my mom pass it on to us it takes 7 years and you pay inheritance tax on the full amount and then we each pay capital gains tax. If my mom sells it then and givus us money we get hit with capital gains tax twice. This guy at work has same problem his dad is Indian business man and owns many house and shop. He said what he is going to so is put the house in a trust and then pass the trust on and then you only get hit with xcapital gains once when you take it out the trust and sell it. I might be wrong about details in this so please correct me if I am wrong.

He was also saying that you can reduce your capital gain tax by doing tthia because you only get hitt with tax on the profit and not the full amount or something like that
 
MrMoonX said:
The problem with the housing market is we don't build affordable homes and the gov are to blame

http://www.theguardian.com/politics/2015/jan/24/coalition-right-to-buy-pledge
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The problem is land prices in the UK. Unfortunately we can't make any more of that.

At the moment builders pay a fortune for land then build as cheaply as possible on it, creating sub standard housing stock that is still rarely profitable if it is designed at the "affordable" end of the market.

EDIT: That's one of the reasons the new "affordable" homes legislation Cameron pledged included scraping many of the more expensive requirements for "green" homes. To try and make it remotely profitable to build them. :(
 
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lol @ the not hate mongers part, did you think you wouldn't be hated for owning more than one property when the poor folk of this country can't even afford one! ;)

http://www.theguardian.com/money/2014/feb/12/how-calculate-capital-gains-tax-sell-home

Have a look at that article, you might find some helpful tips in there. Or just get an accountant to have a look for you, sometimes paying them will be worth the saving they can get you.

Amp34 said:
The problem is land prices in the UK. Unfortunately we can't make any more of that.

At the moment builders pay a fortune for land then build as cheaply as possible on it, creating sub standard housing stock that is still rarely profitable if it is designed at the "affordable" end of the market.

EDIT: That's one of the reasons the new "affordable" homes legislation Cameron pledged included scraping many of the more expensive requirements for "green" homes. To try and make it remotely profitable to build them. :(
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A lot of the problems for builders is getting planning these days, especially in London where it is an absolute nightmare. As a result a lot of plots of land don't get fully utilised because sometimes they'll just take what they can get. If the rules were made simpler and a higher density was allowed even if they had to give some of the flats/houses up for affordable use they'd happily do it.
 
Freefaller said:
Good for you. :) I wouldn't argue against it at all - but if I had a legitimate way of minimising my tax burden I'd take it, but that's why the world is a wonderful diverse place, because everyone is different. :)
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Absolutely. I'm just trying to point out that not everyone tries to minimise the amount of tax they pay in every way possible. There's plenty of champagne socialists about. :)
 
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