Crystal Ball anyone ?

My flat in 2001 cost £190k. It has been rented most of the last 12 years and yields about £900pcm. I still owe £40k on a variable rate interest-only mortgage which is due in August 2015. Market value is £300k.

Keeping the flat was meant to provide retirement income instead of committing to a pension pot and annuity. Now the rules have changed, but you still can’t put a residence into a SIPP (yet) and any transfer would realise the gain … or would it?

Plan A is to pay it off because I have a much-reduced income and am loathe to re-mortgage on expensive buy-to-let terms. An endowment is in place to do this.

What are the alternatives – to mitigate what is a growing CGT liability, after PRR and Lettings Relief the bill would be massive. Is there a way of spreading out the realisation of the capital gain?

The best way to cheat CGT is to die of course, which I fully intend to do some day, so there is a strong argument for keeping the flat. Oh to be rid of leasehold problems though!

New to this and I’m sure I need professional advice, but I’m never sure who to ask.

Many thanks

Mark