capital gains if you move into your buy to let?

Question

I own three houses that are let as investment properties
My wife and i are seperating and i amconsidering moving into one of the buy to let properties and getting rid of the tenant
What are the capital gains tax implications of doing this. Have I effectively sold the investment property to myself at the market value on the day I move in?

Answer 1

Waggy does know something about tax. Unfortunately, he has answered a question posted in the UK section based on US tax law.

Now, assuming that you hold the properties personally - no partnership and no limited company - you have no immediate tax issues. You will not be treated as having disposed of it to yourself. A period of principal private residence can only reduce your taxable gain, never increase it. Likewise, it will reduce any allowable loss. So the future tax issues are not painful either.

Old know all gives a simplistic answer. When/if you come to sell, engage a Chartered or Certified Accountant to do your return. There are a few kinks in the law which will save you more tax than you might think.

Answer 2

I don't believe capital gains would apply in this instance as no tax relief of any sort is in place. So yes you have effectively moved into one of your own properties. Now however if a divorce settlement is in the offing then its a completely different story as she will be entitled to 50% of the property. So if you have to sell up and depending on your financial status and value of property capital gains will apply. Only way out is to come to offline mutual agreement where she doesn't make claim and signs over to you. Again this is best done thru solicitor. For a fee and assuming both party's amicable they can make the split as tax efficient as possible.

Answer 3

You can never have income from a transaction with yourself. You are simply converting a rental to a personal use property.
If you had sold the rental to buy a new house you would pay taxes on the sale.
By converting the rental to personal residence you are now in a position where after a period of time you could sell the property and have the first $250,000 of gain be tax free to you.

Answer 4

When you sell, the gain is divided between the period when it was an investment property and the period when it was your main residence. Say you let it for 2 years and lived in it for 5 years, you would be liable to CGT on 2 sevenths of the total gain, subject to the usual reliefs and allowances.

Answer 5

the problem is complicated, even if the answer interior reason effortless. change into the living house your time-honored position of abode? (did you absolutely stay in it or on the resources or were you living another position). if so, for the way lengthy? so long because it change into your time-honored position of abode and also you moved more desirable than 50 miles remote out of your husbands previous job, you may exclude part of the capital income. Take the style of months you claimed it as your time-honored position of abode and divide with the aid of 24, then multiply that with the aid of $500k. it truly is the quantity of your $162k income that you'll exclude. something will be taxable. even if you should pay taxes, that change right into a reliable funding.