Capital Gains on flip and reinvestment
Firstly excellent forum, thank you.
We recently purchased a property and refurbished it to a high standard to let out. Due to sudden rise in house values in our area we decided to flip it and make a profit.
We exchanged contracts last Friday and we’re completing next week.
The total proceeds from this property are going straight into another property that will be let out.
Question is; will I be liable now for any tax of any kind if full value plus more is going straight into another property?
There is no mortgage involved.
I appreciate seeking professional advice etc., but if it’s a simple answer, ha ha, that might not be necessary.
Just to say we have used recommended services on here, insurance, and will be using Letting Supermarket to let the latest property having spoken to Tony Sheldon.
Thanking you in anticipation.
Regards
Dennis Leverett
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Member Since August 2013 - Comments: 179
4:00 PM, 1st February 2015, About 11 years ago
Absolutely – showing my age there. When I started out is was Death Duty. My old boss used to say that it was something parents were required to do for the benefit of their children!
As to the development my accountant is as conservative as it gets, all was declared and the CGT paid so I’m not too worried.
Member Since August 2016 - Comments: 2
12:55 AM, 28th August 2016, About 10 years ago
HELP MUCH APPRECIATED!
I am remortgaging my only residence on a LET-To-BUY to buy another bigger property.
The property I am interested in buying needs complete renovation and I am considering flipping the new property to buy even bigger if values allow in 6-9months time.
Will I have to pay CGT despite this new property technically being my residential address (even if for a few months after the works are completed)?
Thanks!!
Member Since July 2015 - Comments: 344
12:44 PM, 28th August 2016, About 10 years ago
Hi,
You might be liable for CGT (or possibly income tax) on the gain if you only had it as your main residence for a short period.
http://www.property-tax-portal.co.uk/taxarticle42.shtml
“How long before a property is classed as your Private Residence?
This is a very commonly asked question and the Inland Revenue has not given any specific guidance as to how long you need to live in a property before you can claim the relief.
However as a general rule of thumb, you should look to make it your permanent residence for at least 1 year i.e. 12 months (but it can be less and there have been successful cases for much less than this).”