that guy
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| 23 Oct 2006 15:47:23 |
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| My BTL mortgage advisor at themoneycentre.net advised me that the best way to avoid paying CGT is to continually re-mortgage your BTL properties to their maximum value, and then when it comes to selling, the CGT is calculated on the amount left over after the mortgage has been paid off. Therefore a property bought for £100 000 and sold five years later at £300 000 and had been re-mortgaged up to 85% (£255 000) would only attract CGT on the amount left over (£45 000) after paying off the mortgage. In the meantime you have pocketed the money from the re-mortgages free of tax. I ran this by my accountant, who is not an expert in property tax, and he seemed to think that this was plausible. Does anyone know if this really is how the IR calculates the gain? My mortgage advisor was pretty adamant and he should know. |
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Paul Mac
Posts:21
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| 24 Oct 2006 17:04:32 |
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Your BTL adviser is wrong. It's the gain on the property that matters not the mortgage you have on it. On your example the gain would be £300K - £100K = £200K less reliefs and taper (or whatever it's called these days)
The Money Centre will quite happily remortgage you every couple of years, with the fees they charge who wouldn't? If your in doubt about this answer I'd ask your 'adviser' to put his reply in writing, meanwhile get another adviser who won't charge you a shed load of fees.
You may also need an accountant who is an expert in property tax to ensure you're getting the right advice. The sponsors of this forum have links to people who can help you with these issues or I'm sure other posters can come up with suggestions. I just use my accountant to submit my books to the IR, nothing else. |
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Johnson
Posts:17
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| 30 Nov 2006 11:33:01 |
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| I was just wondering how your btl mortgage guy advises you on tax? Surely this is way beyond their experience and I wonder how the FSA would take to the Money Centre offering tax advice. It would be pretty interesting to hear the excuse on that one. Please post his answer it should be a laugh - if he doesn't get fired for it!!! |
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dminkin
Posts:26
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| 10 Dec 2006 06:47:22 |
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Unbelievable advise!
What sort of accountant do you have too? Any competant accountant would know capital gains tax rules.It's not a specialist area.
Like the others said,its the price you pay(or value at the time),less what the value is when you dispose of it,less any taper relief.
The mortgage has nothing to do with it. |
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that guy
Posts:2
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| 10 Dec 2006 09:25:13 |
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| I have e-mailed my mortgage advisor, Alan Wood at themoneycentre.net to ask him to confirm in writing the advice given. I would assume from the lack of an answer that his tax advice was nothing more than pure fiction, given only to encourage me to re-mortgage regularly. I thought that it may have been a tax loophole but i was a little surprised that no one else seemed to know of it. Thanks for your help. |
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dminkin
Posts:26
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| 17 Dec 2006 07:13:55 |
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I would also e-mail the financial ombudsman as horrendous advice.
Try Landlord Mortgages.WWW.LML.CO.UK for Mortgage quotes,advice etc.They don't charge a fee for mortgages either. |
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The Landlords Club
Posts:21
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| 18 Dec 2006 10:24:46 |
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Can we also mention that our sponsors Netrent.co.uk offer both BTL mortgages and re-mortgages and Tax planning through their business partners.
They do not charge broker fees on mortgages. See the Mortgages link on their website.
Their Strategic Tax Planning service can also show landlords how to mitigate or even remove Tax such as Capital Gains Tax and Inheritance Tax. See the Gatekeeper link on their website.
Please support The Landlords Club sponsors!!!! |
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Johnson
Posts:17
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| 03 Jan 2007 05:17:10 |
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| Whatever you do don't pay broker fees, they're a rip off. Companies like the Money Centre earn a fortune by charging the landlord a fee on top of the money they get from the lender, so you're paying twice for the same advice. Ask the broker a simple question, do you charge a fee? If they do, walk away |
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archierosie
Posts:3
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| 17 Jan 2007 14:14:05 |
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Hi,
I've heard that the Capital Gains Tax can be reduced if you sell the property when you are over the age of 50 when you sell? Something to do with pension propvision? Does anyone know anymore about this?? |
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Anderson
Posts:1
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| 17 Apr 2007 10:00:44 |
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That is poor advice.
Taper relief applies to property once you have held it for over two years and is accumulated at 5% each year...e.g. after 3 years only 95% of the profit is taxable, after 4 years 90%. This is continued up to ten years and leaves you with 60% of the profit as being taxable.
Of course, you have your annual allowance and putting the property into your spouses name as well, will double this.
Hope that helps! :o)
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