I have put down a deposit on a buy to let flat using the capital gain from my residential property. I have set up a business account for the buy to let so that I can declare rental income and expenses. Should I declare the capital gain for the deposit from the same business account or can I simply pay this out of a personal account as non taxable income?
2007-08-09 08:13:01 · 5 answers · asked by world is my oyster 2 in Business & Finance ➔ Taxes ➔ United Kingdom
Did you own more than one property before you bought the flat?
Capital Gains and earnings are not the same thing. In a nutshell, earnings are what you receive money for in return for giving up your time working, and are liable to Income Tax and National Insurance. Capital Gains Tax is charged on the disposal (sale) of assets, whether the asset be property, shares or works of art.
If you only owned the one property (and assuming that you lived in it) then it would probably have been what is called your "Principle Private Residence" (PPR). No Capital Gains Tax (CGT) will arise on the sale of it.
If you now have a flat as well as another property, then it may well be the case that CGT will arise when you come to sell one or other property. You would be well advised to speak to an accountant when you decide to sell.
There are some anomolies, so you could always call your tax office to get advice specific to your circumstances. The first link below will help you find your "local" tax office (you'll need your tax reference - on a P45, P60 or correspondence from HMRC). One problem is that not all staff are trained on CGT, so you might get a bit of a runaround trying to find someone who knows about the subject. I've worked for HMRC for 20 years and my knowledge is cursory at best.
If you don't want to go through that ordeal, the second link is a quick guide but goes into more detail than I can here.
2007-08-09 21:22:22 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Not sure what you mean here.
Have you borrowed money on you home to use as a deposit on a buy to let ?
If so, there is no capital gain (you don't pay that on your main home). Just pay it out of your personal account. You will pay CGT on the let flat when you sell it and you can off set the mortgage payments against rent for tax.
2007-08-09 10:32:50 · answer #2 · answered by Philip W 7 · 0⤊ 0⤋
Are you saying that you've sold your sole main residence and used the money to pay a deposit on a buy to let?
No tax implications at all until you sell the flat.
2007-08-09 11:48:07 · answer #3 · answered by Do not trust low score answerers 7 · 1⤊ 0⤋
Because it's cheap for holiday homes. Think you'll find that at some point in history,all land has been conquered by someone or another, therefore all land is stolen,whichever country you are in. Are you able to, hand on heart, say you don't live on 'stolen' land?
2016-05-18 00:18:21 · answer #4 · answered by ? 3 · 0⤊ 0⤋
nothing personal in it.
2007-08-09 08:20:20 · answer #5 · answered by ? 7 · 0⤊ 1⤋