People that own a second property always ask me for ways to reduce their potential tax liability if they were to sell it. Here are a few useful tips.
If you own a second property you could be liable to pay capital gains tax on the sale of this asset at the rate of 18 or 28%.
I advise my clients with ways to reduce the potential tax liability on the sale significantly which sometimes results in the client having to pay no tax.
There are reliefs available such as lettings relief which if structured properly exempts the first £40,000 of gain, if your partner is named on the property he/she will be entitled to an additional £40,000 exemption as well. There is also the 36 month rule of deemed occupation which you pro rata the time period in which you own the property and thus final 3 years could be exempt. As well as a few others.
There are some real generous reliefs out there, however in order to obtain them you need to make sure that the second property was at some point your principle private residence and it has been subsequently rented out.
The tip is when you buy a second property make sure you move into it and live there for a decent amount of time. Then you will qualify for these generous reliefs and potentially save thousands of pounds.
The reliefs are complicated to work out and you will need to speak with a Tax advisor. If you or your clients own more than one property I can help you save money.
A good referral for me today would be anyone you know who has a rental property, I can help manage the accounts as well as structure a way to save tax
Contact me for further info mitch@ljd.uk.com
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