Hello,

I tried to post this last night but it is not showing here; apologies
if you see double. I know I know there are some landlords in uk.diy
and I will be doing the renovations myself, so I hope it is not too
off topic.

I was interested in buying a house, renovating it, and then selling
it, hopefully for a profit. I haven't done this before. I saw an
accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits. The
accountant advised buying the house and then letting it. He said that
this way, when the house is sold, I would have to pay capital gains
tax rather than income tax and this is more tax "efficient" (i.e. less
to pay).

He also said that it would be best to get my other half involved
because any profits would then be offset against two personal tax
allowances, rather than one. We are not married (I think that makes a
difference tax-wise). Is there a uk.tax group where I should be
posting this?

The only thing holding me back from purchasing a suitable house is not
knowing whether to put both names on the mortgage or whether just to
buy and borrow in my name. The last time I spoke to the accountant, he
said that legal ownership was largely irrelevant and that "beneficial
ownership" was what counts.

I have emailed some more questions to him but thought I would ask
here, whilst I await his reply. Is this right? Can I put the house and
mortgage solely in my name but then split the rental income with my
other half? What is "beneficial ownership"? I am surprised that the
name on the house and mortgage is not relevant.

What do you think about the let vs. sale route? Which would you
do/have you done?

Thanks,
Stephen.

Stephen wrote:

I tried to post this last night but it is not showing here;

I notice you've also posted this to uk.legal.moderated, if the first
time you cross-posted it to both, rather than muli-posting, that will
explain why it appeared in neither group, the moderators get first dibs
on the message and they refuse cross-posts.

On 13/11/2012 07:15, Stephen wrote:

I was interested in buying a house, renovating it, and then selling
it, hopefully for a profit. I haven't done this before. I saw an
accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits. The
accountant advised buying the house and then letting it. He said that
this way, when the house is sold, I would have to pay capital gains
tax rather than income tax and this is more tax "efficient" (i.e. less
to pay).

BTDTGTTS

Had the same advice myself. What I think the above boils down to is
whether your new 'business' is primarily one of 'property development'
or 'letting'. We sold our property after 3 years, paying CGT, and it
didn't catch any attention from HMRC. I suppose you just need to do
the sums (paying income tax versus paying CGT and renting) and work out
for yourself which will be best for you.

He also said that it would be best to get my other half involved
because any profits would then be offset against two personal tax
allowances, rather than one. We are not married (I think that makes a
difference tax-wise). Is there a uk.tax group where I should be
posting this?

That's got to be right, whether you're married or not - that's assuming
you have a stable relationship of course, especially if you're the one
putting up the cash.

The only thing holding me back from purchasing a suitable house is not
knowing whether to put both names on the mortgage or whether just to
buy and borrow in my name. The last time I spoke to the accountant, he
said that legal ownership was largely irrelevant and that "beneficial
ownership" was what counts.

SWMBO and I have rental property in joint names - mortgages, land
registry records, tenancy agreements, the lot; and split the rental
income. If you own the property as 'tenants in common' rather than
'joint tenants'(ggogle what the difference is) you can vary the
proportions of ownership at will, which is reflected in the distribution
of rental income between you. So if one of you is pays top rate of tax
and the other pays basic rate, you can set the ownerships as say 1%:99%.

I have emailed some more questions to him but thought I would ask
here, whilst I await his reply. Is this right? Can I put the house and
mortgage solely in my name but then split the rental income with my
other half? What is "beneficial ownership"? I am surprised that the
name on the house and mortgage is not relevant.

Not sure about beneficial ownership; however if you don't own the
property jointly when you come to sell it, then you can't take advantage
of your partner's CGT allowance, which is a no-brainer. You can
transfer assets around immediately before the sale, but it may attract
HMRC attention as not being 'real' and just being a tax dodge, and
dissallowed.

www.taxationweb.co.uk is a pretty good forum

David

Stephen wrote:
accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits.

Bollox. It's income regardless of where the income comes from, but
the income from the sale of property is a capital sale, and garners
capital gains tax. If you want to be a landlord, make a concious
decision to be a landlord, don't do it by default or as a stop-gap
between buying and selling.

Capital Gains Tax is paid on the profit from a capital sale, that
is the sale price minus the purchase price minus all capital
investment (refurbishment and improvement, not running repairs)
minus a CTG allowance for each owner.

For example, if you buy a property for £60K, spend 60K refurb'ing
it, and sell it for £180K that is: 180K - £60K - 60K - 10K allowance
equals 50K taxable. The tax rate you pay is determined by adding
that 50K to your other income for the tax year. The income tax
band that puts you in determines the GCT band you pay. If the
50K plus your other income puts you in the lower income tax
band you pay 18% CTG on the 50K. If the 50K plus your other
income puts you in the top income tax band you pay 28% on
the 50K.

He also said that it would be best to get my other half involved
because any profits would then be offset against two personal tax
allowances, rather than one.

The other party has to legally be a co-owner on the deeds and
mortgage, you can't just "assign" a share to them.

We are not married (I think that makes a difference tax-wise).

Only if you're chosing to die before you sell it.

The only thing holding me back from purchasing a suitable house is not
knowing whether to put both names on the mortgage or whether just to
buy and borrow in my name.

If it's only in your name, you are the sole owner, and all tax
liabilities
are solely yours. If you want more than one person to be liable to
tax then the other person(s) must be named on the mortgage and
title deeds and be also liable to pay the mortgage and have rights
to the property.

What do you think about the let vs. sale route? Which would you
do/have you done?

Decide what you want to do. Do you *want* to be a landlord or do
you want to property refurbishment?

JGH

Capital Gains Tax is paid on the profit from a capital sale, that
is the sale price minus the purchase price minus all capital
investment (refurbishment and improvement, not running repairs)
minus a CTG allowance for each owner.


If the trade is buying and selling properties then there is no "capital
sale". It's just a sale - like a trade of buying and selling widgets.
but I have to say that is a rather misleading combination of "profit" .
The accountant was right (as Lobster has already posted). And FTAOD
buying and selling just one property with a view to a profit can be a
trade

--
Robin
reply to address is (meant to be) valid

On Tue, 13 Nov 2012 00:42:54 -0800 (PST), jgharston wrote:

accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits.

Bollox. It's income regardless of where the income comes from, but
the income from the sale of property is a capital sale, and garners
capital gains tax.

Even if the property is bought with the intention of refurbishing and
selling, ie "property development" no letting or use as main or second
home, rather than bought with the intention of letting or using as main
or second home?

There are tax differences between main and second homes.

We are not married (I think that makes a difference tax-wise).

Only if you're chosing to die before you sell it.

Who knows when anyone is going to die. Might lose an argument with a bus
this afternoon...

Not being married is a legal mine field.
Not being married and and not having Wills is very very messy indeed. The
surviving partner has very few (if any) rights to the deceased estate.

--
Cheers
Dave.

"Stephen" wrote in message
...
snip
I was interested in buying a house, renovating it, and then selling
it, hopefully for a profit. I haven't done this before. I saw an
accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits. The
accountant advised buying the house and then letting it. He said that
this way, when the house is sold, I would have to pay capital gains
tax rather than income tax and this is more tax "efficient" (i.e. less
to pay).

snip

When I last looked into this I found it quite complex, but all related to
capital gains tax.
Selling a house is a capital gain to a private individual.
[I don't know what rules apply if you are running a business to renovate and
sell on properties - in that case it might be considered income to the
business instead of a capital gain; seems reasonable.]
If you own a house and don't live in it then when you sell you are liable
for CGT on any period when you didn't live in it as your primary residence.
AIUI this is to tax people with second (third etc.) homes who effectively
invest in the property market and take habitable houses 'off the market'.

When I last looked you were not liable for CGT on a home where
(1) You lived in it as your primary residence
(2) You rented it out (I assume this was to encourage people to rent out
empty houses instead of just sitting on them as unused housing stock and
waiting for them to appreciate).
In either case the last three years of ownership did not count.
I suspect (again) that this was to enable people to buy a house before they
had sold the previous one and give them a reasonable time to sell without
CGT liability.
We did this twice (with bridging loans) when moving locations at the
company's expense.
So reasonable to allow a 'bridging' window for people to relocate without
penalising them with CGT.

So unless the rules have changed you should not be liable for CGT on a
rental property for the period which is occupied by a tenant and in any case
for the last three years.
You are liable for tax on any rental income after deductons.

On this basis it would look a no brainer to buy, do up, then sell withing
three years thus avoiding CGT.
Which is why I suspect that going down that route would be regarded as
running a business for renovating houses and any gain would be treated as
income to the business.

So your accountant masy be partly right - I hope he is wrong about the CGT
on a rental property because we are renting out a property which used to be
our primary residence which we couldn't reasonably sell and don't expect to
accrue CGT against it if we finally decide we can sell it.

We will be liable for some CGT on our now primary residence should we sell
it before the rules change again because we bought it before we moved into
it so it was unoccupied for a time.

You should anyway look for a second opinion.
Try the Motley Fool forum http://www.fool.co.uk/ which covers property
renovating and buy to let.

Usual disclaimers - IANAL etc.

HTH

Dave R
--
No plan survives contact with the enemy.
[Not even bunny]

Helmuth von Moltke the Elder

(\__/)
(='.'=)
(")_(")

On Tue, 13 Nov 2012 07:42:19 +0000, Andy Burns
wrote:

I notice you've also posted this to uk.legal.moderated, if the first
time you cross-posted it to both, rather than muli-posting, that will
explain why it appeared in neither group, the moderators get first dibs
on the message and they refuse cross-posts.

Thank you. That's very interesting.

I did cross post to both groups. I thought the solicitors in the legal
group and the landlords in the diy group could give me the theory and
the practice.

I did wonder whether cross posting may have been the issue, which is
why I reposted as separate messages. I am surprised that the OP did
not get posted to uk.diy. If moderators blocked it to ulm that's their
right but I am surprised that they could prevent it being posted to
uk.diy. It doesn't seem right that the moderators of one group can
block posts to a completely different group.

I must learn more about moderated groups (where can I?). Thinking
about this: where to messages go to be read by moderators: is there
another group that only they have access to? How do you become a
moderator? Do you only need one moderator to approve a post or do you
need a majority vote?

If the cross post had been allowed, news clients would have filtered
my post so that you only saw it once. Because I have had to submit two
separate posts, it now appears twice, so it seems to me that blocking
cross posts might be causing the very problems that they are trying to
solve. I've learnt a lot from various threads in uk.diy that have come
here after being cross posted to or from another group.

Just my random thoughts!

Thanks,
Stephen.

On 13/11/2012 09:21, Stephen wrote:
On Tue, 13 Nov 2012 07:42:19 +0000, Andy Burns
wrote:

I notice you've also posted this to uk.legal.moderated, if the first
time you cross-posted it to both, rather than muli-posting, that will
explain why it appeared in neither group, the moderators get first dibs
on the message and they refuse cross-posts.

Thank you. That's very interesting.

I did cross post to both groups. I thought the solicitors in the legal
group and the landlords in the diy group could give me the theory and
the practice.

I did wonder whether cross posting may have been the issue, which is
why I reposted as separate messages. I am surprised that the OP did
not get posted to uk.diy. If moderators blocked it to ulm that's their
right but I am surprised that they could prevent it being posted to
uk.diy. It doesn't seem right that the moderators of one group can
block posts to a completely different group.

I must learn more about moderated groups (where can I?). Thinking
about this: where to messages go to be read by moderators: is there
another group that only they have access to? How do you become a
moderator? Do you only need one moderator to approve a post or do you
need a majority vote?

If the cross post had been allowed, news clients would have filtered
my post so that you only saw it once. Because I have had to submit two
separate posts, it now appears twice, so it seems to me that blocking
cross posts might be causing the very problems that they are trying to
solve. I've learnt a lot from various threads in uk.diy that have come
here after being cross posted to or from another group.

Just my random thoughts!

Thanks,
Stephen.

Not all news reading processes ensure that you see only one response.

Sensible cross-posting can be very useful. But excessive, poorly
targeted, spammy cross-posting has severely affected its acceptability.

And, when moderating comes to town, then cross-posting can be
problematic - with both timing (due to moderating delays) and absence
(due to posts being moderated out and individuals responding on one
group only) making threads appear haphazard and incoherent. Even more so
than many already do! :-)

--
Rod

On Tue, 13 Nov 2012 07:49:34 +0000, Lobster
wrote:

Had the same advice myself. What I think the above boils down to is
whether your new 'business' is primarily one of 'property development'
or 'letting'. We sold our property after 3 years, paying CGT, and it
didn't catch any attention from HMRC. I suppose you just need to do
the sums (paying income tax versus paying CGT and renting) and work out
for yourself which will be best for you.

I enjoy doing DIY around the house and thought I would like to try
property developing; doing as much as I can but getting people in
where I can't (physically or legally) do the job.

From my very limited knowledge, I think you get to keep a higher
percentage if you pay CGT. Each partner has an annual £11,000
allowance, so you would not pay CGT on the first £22,000 of the
profits. The personal allowances with income tax are much smaller and
these would be eaten up by our wages (as we are new to this, we would
keep our day jobs as back-up).

The CGT route is only useful if your plan is more long-term. If I
wanted short term returns, for example buying property two with the
profit from property one, I would have to go down the income tax
route. I think you become a 40% payer at £42,000, which is a lot of
money except when you talk about property. WRT to property £42,000 is
not very much. On the other hand, I suppose it is only profit that is
taxed not the sale price. I'm only looking at a mid terrace, so the
profit will be more modest.

Not sure about beneficial ownership however if you don't own the property
jointly when you come to sell it, then you can't take advantage of your
partner's CGT allowance, which is a no-brainer.

That's what I thought originally but now I am not so sure. I have
googled "beneficial owner" and some of the results are from HMRC. They
contradict themselves. It says that the beneficial owner will have to
pay tax regardless of whether they are the legal owner but on another
page they say one way they identify the beneficial owner is by looking
who the legal owner is!

I think this concept of beneficial ownership only has two uses: for
tax and in divorce, allowing someone who is not legal owner a share of
profits from a house solely in a partner's name.

Stephen.

On Nov 13, 8:42*am, jgharston wrote:
Stephen wrote:


For example, if you buy a property for £60K, spend 60K refurb'ing
it, and sell it for £180K that is: 180K - £60K - 60K - 10K allowance
equals 50K taxable. The tax rate you pay is determined by adding
that 50K to your other income for the tax year. The income tax
band that puts you in determines the GCT band you pay. If the
50K plus your other income puts you in the lower income tax
band you pay 18% CTG on the 50K. If the 50K plus your other
income puts you in the top income tax band you pay 28% on
the 50K.

Looking at sites like this:

http://www.sayersb.co.uk/tax%20rates/cgt.html

I don't think it is added to your income but taxed as a separate
amount.

Jonathan

On 13/11/2012 07:15, Stephen wrote:
Hello,

I tried to post this last night but it is not showing here; apologies
if you see double. I know I know there are some landlords in uk.diy
and I will be doing the renovations myself, so I hope it is not too
off topic.

I was interested in buying a house, renovating it, and then selling
it, hopefully for a profit. I haven't done this before. I saw an
accountant who said that if I did this, the sale will be considered
income and I will have to pay income tax on the profits. The
accountant advised buying the house and then letting it. He said that
this way, when the house is sold, I would have to pay capital gains
tax rather than income tax and this is more tax "efficient" (i.e. less
to pay).

He also said that it would be best to get my other half involved
because any profits would then be offset against two personal tax
allowances, rather than one. We are not married (I think that makes a
difference tax-wise). Is there a uk.tax group where I should be
posting this?

The only thing holding me back from purchasing a suitable house is not
knowing whether to put both names on the mortgage or whether just to
buy and borrow in my name. The last time I spoke to the accountant, he
said that legal ownership was largely irrelevant and that "beneficial
ownership" was what counts.

I have emailed some more questions to him but thought I would ask
here, whilst I await his reply. Is this right? Can I put the house and
mortgage solely in my name but then split the rental income with my
other half? What is "beneficial ownership"? I am surprised that the
name on the house and mortgage is not relevant.

What do you think about the let vs. sale route? Which would you
do/have you done?

Thanks,
Stephen.



http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm

http://www.hmrc.gov.uk/cgt/property/

http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm

http://www.hmrc.gov.uk/cgt/property/

Yep - and the OP might wish to note in particular
http://www.hmrc.gov.uk/cgt/property/basics.htm which has

"Property trading
If you buy and sell property as your business you pay Income Tax rather
than Capital Gains Tax on any profits you make from the property. This
applies whether you are a sole trader or in a partnership. This may
include a one-off purchase and sale of a property. You usually pay any
Income Tax due by completing a Self Assessment tax return. "


--
Robin
reply to address is (meant to be) valid

Not being married is a legal mine field.
Not being married and and not having Wills is very very messy indeed. The
surviving partner has very few (if any) rights to the deceased estate.


Having joint bank accounts helps

On 13/11/2012 09:38, Stephen wrote:
On Tue, 13 Nov 2012 07:49:34 +0000, Lobster
wrote:

Had the same advice myself. What I think the above boils down to is
whether your new 'business' is primarily one of 'property development'
or 'letting'. We sold our property after 3 years, paying CGT, and it
didn't catch any attention from HMRC. I suppose you just need to do
the sums (paying income tax versus paying CGT and renting) and work out
for yourself which will be best for you.

I enjoy doing DIY around the house and thought I would like to try
property developing; doing as much as I can but getting people in
where I can't (physically or legally) do the job.

From my very limited knowledge, I think you get to keep a higher
percentage if you pay CGT. Each partner has an annual £11,000
allowance, so you would not pay CGT on the first £22,000 of the
profits. The personal allowances with income tax are much smaller and
these would be eaten up by our wages (as we are new to this, we would
keep our day jobs as back-up).

The CGT route is only useful if your plan is more long-term. If I
wanted short term returns, for example buying property two with the
profit from property one, I would have to go down the income tax
route. I think you become a 40% payer at £42,000, which is a lot of
money except when you talk about property. WRT to property £42,000 is
not very much. On the other hand, I suppose it is only profit that is
taxed not the sale price. I'm only looking at a mid terrace, so the
profit will be more modest.

I presume you could use the MP's trick and move into your new property.
No CGT to pay on sale of your "main" residence.



--
Cheers,

John.

/================================================== ===============\
| Internode Ltd - http://www.internode.co.uk |
|-----------------------------------------------------------------|
| John Rumm - john(at)internode(dot)co(dot)uk |
\================================================= ================/

On Tue, 13 Nov 2012 00:42:54 -0800 (PST), jgharston
wrote:

Decide what you want to do. Do you *want* to be a landlord or do
you want to property refurbishment?

That's another dilemma I'm in at the moment. It all depends how this
ones goes. If I enjoyed doing up a house more than my day job (which
is quite likely!) I would love to give up my job and do property
development.

However, if when I have finished working on the house, I cannot sell
it for a reasonable profit, perhaps it makes sense to let it and wait
for the house prices to pick up?

But I do take the point of another reply, which said that doing up to
sell and doing up to let involve different work being done. If only I
had a crystal ball!

Thanks,
Stephen.

PS I'm looking at the links other posters gave - thanks.

On Tue, 13 Nov 2012 10:09:47 -0000, "Robin" wrote:

If you buy and sell property as your business

At what point does something become your business? The accountant
asked whether I would keep my employee job. I think he was suggesting
that if you worked full time in another job, property development
could not be considered your primary occupation. However, I would
expect HMRC to counter this by saying it is possible to have two jobs.

On Tue, 13 Nov 2012 11:41:00 +0000, Stephen
wrote:

On Tue, 13 Nov 2012 00:42:54 -0800 (PST), jgharston
wrote:

Decide what you want to do. Do you *want* to be a landlord or do
you want to property refurbishment?

That's another dilemma I'm in at the moment. It all depends how this
ones goes. If I enjoyed doing up a house more than my day job (which
is quite likely!) I would love to give up my job and do property
development.

However, if when I have finished working on the house, I cannot sell
it for a reasonable profit, perhaps it makes sense to let it and wait
for the house prices to pick up?

Every house will sell. It's just at what price.
When prices go up it'll cost you more to buy.


But I do take the point of another reply, which said that doing up to
sell and doing up to let involve different work being done. If only I
had a crystal ball!


You have to do the research. Look at areas very local to you. No point
spending hours commuting to a property - especially if at first you
can only spend after work and weekends on it.

Chat to some agents. Some are more helpful than others. Ask to be kept
informed of any repos coming up. Go view a few houses to get an idea
of what people are selling for the money.

If you're looking to sell - then can you decorate to a high standard?
Can you dress a house (additional cost) to give that lifestyle
impression that'll make people fall for it?

Look out for houses for sale that turn into repos. Some of the banks
are very keen to just get shut at the moment - maybe though they know
they have more to come yet.

Thanks,
Stephen.

PS I'm looking at the links other posters gave - thanks.
--
http://www.voucherfreebies.co.uk

"Stephen" wrote in message
...
On Tue, 13 Nov 2012 00:42:54 -0800 (PST), jgharston
wrote:

Decide what you want to do. Do you *want* to be a landlord or do
you want to property refurbishment?

That's another dilemma I'm in at the moment. It all depends how this
ones goes. If I enjoyed doing up a house more than my day job (which
is quite likely!) I would love to give up my job and do property
development.

However, if when I have finished working on the house, I cannot sell
it for a reasonable profit, perhaps it makes sense to let it and wait
for the house prices to pick up?

If you don't make a profit on a resale then you paid too much.

Learn your lesson and move on - you make your profit on a refurb when you
buy. You need to learn to buy properly to make this work, waiting for an
increasing market is a mug's game.

tim

"Stephen" wrote in message
...
On Tue, 13 Nov 2012 10:09:47 -0000, "Robin" wrote:

If you buy and sell property as your business

At what point does something become your business? The accountant
asked whether I would keep my employee job. I think he was suggesting
that if you worked full time in another job, property development
could not be considered your primary occupation. However, I would
expect HMRC to counter this by saying it is possible to have two jobs.

which they will

whether a "hobby" is a business will solely depend upon the facts associated
with that "business".

Whether you have any other employment is completely irrelevant

tim

On 13/11/2012 12:11, tim..... wrote:

"Stephen" wrote in message
...
On Tue, 13 Nov 2012 00:42:54 -0800 (PST), jgharston
wrote:

Decide what you want to do. Do you *want* to be a landlord or do
you want to property refurbishment?

That's another dilemma I'm in at the moment. It all depends how this
ones goes. If I enjoyed doing up a house more than my day job (which
is quite likely!) I would love to give up my job and do property
development.

However, if when I have finished working on the house, I cannot sell
it for a reasonable profit, perhaps it makes sense to let it and wait
for the house prices to pick up?

If you don't make a profit on a resale then you paid too much.

Learn your lesson and move on - you make your profit on a refurb when
you buy. You need to learn to buy properly to make this work, waiting
for an increasing market is a mug's game.

I agree. It's just an attempt to fudge the original mistake in paying
too much or doing the refurb over budget.

There's a further point, which is that a newly refurbed property will
generally sell at a premium price, because of the crisp new look of the
place. If you rent it out for a couple of years, it's bound to look
rather tired, and there will be reasonable wear and tear. hence you lose
that premium price.

I would say that you should make sure that what you do is commercial,
and worry less about the tax side. So, decide before you start whether
you are going to be a property developer or a landlord. The sort of
property you would buy to let is entirely different from the sort you
would buy to refurbish and sell on. If you want to let it, you probably
need the property to be near transport, whereas that is less important
for sale to an end user – that is just an example of the sort of
conflict you need to resolve.

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

So if you intend to sell within three years, you don't really need to
include your partner as you will be CGT exempt anyway?

How soon after buying it can you sell and attract CGT rather than
income tax? 6 months? A year?

Thanks,
Stephen.

On 13/11/12 07:15, Stephen wrote:
[...]
I was interested in buying a house, renovating it, and then selling
it, hopefully for a profit. I haven't done this before.

[...]


What do you think about the let vs. sale route? Which would you
do/have you done?


Property market must be picking up if people are coming here asking
these sort of questions again.
I thought the obsession with making money from property might have died
after the recession of 20 years ago; instead we have 'buy to let'. The
present recession just seems to b reinforcing that.
If you are renovating a house, what is the market for it. Will you
renovate it for owner occupation or expect a buy-to-let buyer? If the
later then your options remain open when the renovation is complete.

Do you already own a house? If not then you could live in in it: CGT
would not apply to a sole or main residence.

--
djc

In message , Stephen
writes

I think this concept of beneficial ownership only has two uses: for
tax and in divorce, allowing someone who is not legal owner a share of
profits from a house solely in a partner's name.

Stephen.
"Beneficial Owner" is a concept to present blatant manipulation to avoid
tax and not something to worry about if you behave in a straightforward
way.
Which route to go down sales v rental depends on how quickly you want to
recoup any capital outlay including repaying any loans. Mortgages are
long term loans and it can be costly to repay quickly.

If you are renting then mortgage/loan repayments are a cost which can be
offset against rental income and so reduce your tax obligation.
So do you want quick return of your capital based on the increase in
value by upgrading or are you happy to take rental income and hope for
eventually a greater increase in capital value over a number of years.
With current low interest rates that may be a viable option but if rates
rise say after 2 years you may find it not worth the hassle.

Depends also what area you are in and what type of tenants you are
likely to attract for the type of property. One bad tenant trashing the
property can make a big difference.
--
bert

On Tue, 13 Nov 2012 12:17:02 -0000, "tim....."
wrote:


I think RightMove have changed the market to a kind of Dutch auction
where, when you knock enough off the price, you are suddenly deluged with
serious buyers.

A couple that I looked at recently achieved a sale after months of
stagnation by a 5K reductions (on circa 180K asking).

When did we get into this world of any offer under asking is considered
"insulting", especially in a falling/stagnant market.


It is crazy.
The expectations of years of watching Homes under the hammer, Lx3,
Rx2, Property Ladder etc.
Even Kirsty and Phil fail hugely and regularly are shocked that people
want to pay less than asking price.

Useful addons for anyone wanting to browse rightmove though::
Property bee for firefox is very nice though to install.
Property Track for Chrome.

--
http://www.voucherfreebies.co.uk

On Nov 13, 3:34*pm, "David WE Roberts" wrote:
"Stephen" wrote in message

...

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

So if you intend to sell within three years, you don't really need to
include your partner as you will be CGT exempt anyway?

How soon after buying it can you sell and attract CGT rather than
income tax? 6 months? A year?

Not sure that we are on the same idea here.
I don't think you have the option to chose between income tax and CGT - it
should be income tax on the sale or income tax on the rental income.

There are two seperate tax regimes - renovating property and renting
property.

What I think happens is:

If you buy to do up and sell then it doesn't matter how quickly or slowly
you sell any profit is treated as income and CGT doesn't come into it (but
see below).

If you buy to rent then (apart from the time you spend doing the place up)
you should not have any liability for CGT when you sell.

It's not as simple as that. Everything hinges on which is your "main
residence". Relief from CGT for a property that has been let is
limited to £40K and only applies if the property has been you main
residence at some time. Any period as "main residence" is exempt. Also
if make it your main residence before selling you can extend that
period to cover the last 3 years before the sale.

There are various ways for a property to become your "main residence"
but simply living there may not be sufficient for HMRC. You need to
nominate it within two years of purchase, or show intent, e.g., by
getting on the electoral roll at the new address, etc., ...

MBQ

"Man at B&Q" wrote in message
...
On Nov 13, 3:34 pm, "David WE Roberts" wrote:
"Stephen" wrote in message

...

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

So if you intend to sell within three years, you don't really need to
include your partner as you will be CGT exempt anyway?

How soon after buying it can you sell and attract CGT rather than
income tax? 6 months? A year?

Not sure that we are on the same idea here.
I don't think you have the option to chose between income tax and CGT -
it
should be income tax on the sale or income tax on the rental income.

There are two seperate tax regimes - renovating property and renting
property.

What I think happens is:

If you buy to do up and sell then it doesn't matter how quickly or slowly
you sell any profit is treated as income and CGT doesn't come into it
(but
see below).

If you buy to rent then (apart from the time you spend doing the place
up)
you should not have any liability for CGT when you sell.

It's not as simple as that. Everything hinges on which is your "main
residence". Relief from CGT for a property that has been let is
limited to £40K

Not correct

Letting relief is limited to 40K but there are other reliefs you can claims
as well.

and only applies if the property has been you main
residence at some time.

I thought letting relief was only available if it was your main home
*before* any period of letting (BICBW).

Any period as "main residence" is exempt. Also
if make it your main residence before selling

You do not need to do this if it was your main home before you let it.

you can extend that
period to cover the last 3 years before the sale.

There are various ways for a property to become your "main residence"
but simply living there may not be sufficient for HMRC. You need to
nominate it within two years of purchase, or show intent, e.g., by
getting on the electoral roll at the new address, etc., ...

No you don't. Your PPR for tax purposes (at any one time) is the one that
you nominate from those houses which you own which are available for your
own use. There are no other qualifying criteria that the revenue can use to
reject your nomination.

Of course if you fail to make a nomination then those things will be taking
into account when the revenue decide for you.

tim

On Nov 14, 2:09*pm, "tim....." wrote:
"Man at B&Q" wrote in ...









On Nov 13, 3:34 pm, "David WE Roberts" wrote:
"Stephen" wrote in message

. ..

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

So if you intend to sell within three years, you don't really need to
include your partner as you will be CGT exempt anyway?

How soon after buying it can you sell and attract CGT rather than
income tax? 6 months? A year?

Not sure that we are on the same idea here.
I don't think you have the option to chose between income tax and CGT -
it
should be income tax on the sale or income tax on the rental income.

There are two seperate tax regimes - renovating property and renting
property.

What I think happens is:

If you buy to do up and sell then it doesn't matter how quickly or slowly
you sell any profit is treated as income and CGT doesn't come into it
(but
see below).

If you buy to rent then (apart from the time you spend doing the place
up)
you should not have any liability for CGT when you sell.

It's not as simple as that. Everything hinges on which is your "main
residence". Relief from CGT for a property that has been let is
limited to £40K

Not correct

Letting relief is limited to 40K

That sounds like relief "for a property that has been let"

but there are other reliefs you can claims
as well.

Specific to letting?


and only applies if the property has been you main
residence at some time.

I thought letting relief was only available if it was your main home
*before* any period of letting (BICBW).


Any period as "main residence" is exempt. Also

if make it your main residence before selling

You do not need to do this if it was your main home before you let it.

Oh FFS Did I say you "need" to? I said *if* on the grounds that the
"final 3 year" rule can be quite advantageous.

you can extend that
period to cover the last 3 years before the sale.
There are various ways for a property to become your "main residence"
but simply living there may not be sufficient for HMRC. You need to
nominate it within two years of purchase, or show intent, e.g., by
getting on the electoral roll at the new address, etc., ...

No you don't. *Your PPR for tax purposes (at any one time) is the one that
you nominate from those houses which you own which are available for your
own use. *There are no other qualifying criteria that the revenue can use to
reject your nomination.


*If* you make a nomination.


Of course if you fail to make a nomination then those things will be taking
into account when the revenue decide for you.

Indeed. I listed alternatives. The alternating to nominating it being
consideration of the other things.

Thanks for confirming what I said, though I fail to se why you need to
say it such a disagreeing way.

MBQ

"Man at B&Q" wrote in message
...
On Nov 14, 2:09 pm, "tim....." wrote:
"Man at B&Q" wrote in
...









On Nov 13, 3:34 pm, "David WE Roberts" wrote:
"Stephen" wrote in message

. ..

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

So if you intend to sell within three years, you don't really need
to
include your partner as you will be CGT exempt anyway?

How soon after buying it can you sell and attract CGT rather than
income tax? 6 months? A year?

Not sure that we are on the same idea here.
I don't think you have the option to chose between income tax and
CGT -
it
should be income tax on the sale or income tax on the rental income.

There are two seperate tax regimes - renovating property and renting
property.

What I think happens is:

If you buy to do up and sell then it doesn't matter how quickly or
slowly
you sell any profit is treated as income and CGT doesn't come into it
(but
see below).

If you buy to rent then (apart from the time you spend doing the place
up)
you should not have any liability for CGT when you sell.

It's not as simple as that. Everything hinges on which is your "main
residence". Relief from CGT for a property that has been let is
limited to £40K

Not correct

Letting relief is limited to 40K

That sounds like relief "for a property that has been let"

but there are other reliefs you can claims
as well.

Specific to letting?

they don't need to be specific to letting to make your statement "Relief
from CGT for a property that has been let is limited to £40K" to be wrong
(due to ambiguity), and that is the mistake that you are making here

tim

On Wed, 14 Nov 2012 07:46:11 +0000, mogga wrote:

It is crazy.
The expectations of years of watching Homes under the hammer, Lx3,
Rx2, Property Ladder etc.


WTF are Lx3 and Rx2?




--

On 15/11/2012 14:44, The Other Mike wrote:
On Wed, 14 Nov 2012 07:46:11 +0000, mogga wrote:

It is crazy.
The expectations of years of watching Homes under the hammer, Lx3,
Rx2, Property Ladder etc.


WTF are Lx3 and Rx2?




Location, Location, Location
Relocation, Relocation

--
Rod

On Thu, 15 Nov 2012 15:04:28 +0000, polygonum
wrote:

On 15/11/2012 14:44, The Other Mike wrote:
On Wed, 14 Nov 2012 07:46:11 +0000, mogga wrote:

It is crazy.
The expectations of years of watching Homes under the hammer, Lx3,
Rx2, Property Ladder etc.


WTF are Lx3 and Rx2?




Location, Location, Location
Relocation, Relocation


ty.


That's thank you for those who don't know.
--
http://www.voucherfreebies.co.uk

On Tue, 13 Nov 2012 09:18:34 -0000, "David WE Roberts"
wrote:

In either case the last three years of ownership did not count.

When I looked at this, it was 3 years, but not the last 3 years.
It was the first year and last 2 years, or the first two years
and last year, I forget which way around. Also, at the end of
the first year, you needed to inform the IR which is your main
residence, or they reserved the right to decide for you.

There was a notable exception - if you end up with 2 properties
due to marriage, then the CGT exempt period is only 6 months.

However, this was all before the CGT changes a few years ago,
and I don't know how much of it still stands today.

--
Andrew Gabriel
[email address is not usable -- followup in the newsgroup]