how do i............?

Question

avoid paying tax on a house i wish to sell. I own a property on top of the one i live in and i wish to sell it but i know i will have to pay tax on it. how do i get out of this. I have been letting the property for the last five years. Thanks

i'm in the UK

Answer 1

Depending on where you live there are several ways you can do it.

-Trade the properties in a 1031 exchange. Check the IRS website for rules.

-Create an LLC and gift shares of the property to your children in $10,000 increments annually. It's like a trust but you can move the money more easily.

-Create a corporation of the real estate assets and operate the assets as a business that employes you and your children. This is the best one, but you'll need an attourney that understand corporate tax shelters and probably a good accountant. But this way you can avoid the tax and still access your money.

Give their property to a charitable remainder trust. You avoid the tax but you don't get any money.

Answer 2

The property you live in, if it has an outstanding mortgage that is more than the profit of the property sold, you can pay down the principal equal to the profit. This way the profit that tax is due on is "0",. This will cause the tax write off for the property you live in to drop and the pay off of the mortgage to occur much sooner than normal. At lease, legally you would avoid paying tax and have time to make more serious decisions.

Hope this answer works in th UK, It does in the USA.

Answer 3

If you are in the uk you are taxed at 40% only on the profit that you make.The current threshold for capital gains is around £9000. If you want to avoid it altogether make it your 'main residence' for a few months by getting bank statement and utility bills sent there in your name. Then sell it as your main res and voila you wont have to pay nice Mr Brown a penny.

Answer 4

That's why dbharrold is a mortgage broker.

Much more info required.
Was the flat ever your SMR? If so you can claim exemption for the last three years, notwithstanding the letting and also claim exemption for the first £40K gains.
Full history and values required for a decent answer.

Answer 5

Let it out - but an advertisement in your local paper

The only other way is giving it to some one i.e. niece

Answer 6

There isnt any way out that I can see - the government have got you on this one xxx

Answer 7

speak to a good financial advisor

Answer 8

To the person who posted above me did you not look at the catagory the question was in?

Answer 9

depends on the country

Answer 10

u cant