CGT on selling a share of my Buy to Let?

CGT on selling a share of my Buy to Let?

9:03 AM, 16th May 2022, About 2 years ago 6

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I need to raise some finance shortly and one of the options I am looking into is to sell 2/3rds and retain 1/3rd of a freehold BTL property I’ve had for 20 years.

Going forward the house will remain tenanted and we will split the rent 3 equal ways, any expenses will also be split 3 equal ways.

Will I have to pay CGT on the 2/3rds I sell to my business partners?

Example : £700,000 value of the house
I will receive £233K from 2 business partners they have bought 1/3rd each = £ 466k total.
Will I have to pay CGT on £466k?
Can I avoid CGT on £466k if I purchase another property as my main residence?

Thank you folks.

BOB


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Judith Wordsworth

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9:49 AM, 16th May 2022, About 2 years ago

Not sure if feasible but why not create a 999 year lease at a paper corn ground rent on the property and keep the freehold?
Sell the lease for the amount your tenants can raise.
Also a clause in the lease giving incremental or outright options to purchase the freehold at a future date.

Bob Calay

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9:54 AM, 16th May 2022, About 2 years ago

Reply to the comment left by Judith Wordsworth at 16/05/2022 - 09:49
Hi ..It is possible to sell 2/3rd as Ive been told by the bank they would lend against the property . Just hard to confirm if CGT is due and how much .

NewYorkie

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9:58 AM, 16th May 2022, About 2 years ago

Not clear if this is classed as your home. If so, shouldn't be any CGT.

Bob Calay

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10:00 AM, 16th May 2022, About 2 years ago

Reply to the comment left by NewYorkie at 16/05/2022 - 09:58
This house has been rented out for last 20 years , so not main residence.

NewYorkie

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10:03 AM, 16th May 2022, About 2 years ago

If you own elsewhere, you will be liable for CGT. Make sure you deduct all your costs (refurb, buying, selling...) and apply all tax reliefs (although they aren't as generous as they were).

Graham Bowcock

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11:52 AM, 16th May 2022, About 2 years ago

If the house is rented you will have CGT. Purchase price can be deducted from sale value, as can purchase and sale costs.

You cannot roll over the gain into another property.

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