Landlords Exit Strategy – Readers CGT Question

Landlords Exit Strategy – Readers CGT Question

11:13 AM, 29th December 2012, About 11 years ago 14

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Landlords Exit Strategy - Readers CGT Question

“Hello Mark, very impressed with your site, I have a question for you:

My wife and I have a small portfolio of property which has been built up over the years by keeping on our residences rather than selling to finance the new ones. None were purchased on Buy to let mortgages.

We own them jointly which I see from you articles may not be the best option but aside from this we are considering selling the properties that we let to clear the loan on our principle home. The let properties have remnants of the original mortgages left to pay. Our principle property has been financed by a business loan.

As the money raised from the let properties is to be used to pay off the loan on the principle property will this money be first subject to CGT or can it be classed as transfer of equity for example within a business or such like.

Best regards Chris 


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Comments

Puzzler

4:35 AM, 1st January 2013, About 11 years ago

The type of mortgage is irrelevant as to CGT. CGT will be payable on all the let properties after your personal CGT allowance is deducted unless you can offset some principal residence relief, or you have made a loss on any of them, you need advice as to whether you can do that or not. Also the status of your main home which was bought with a business loan, is it a guest house or something? otherwise how did you manage to get a business loan to buy it? You cannot transfer the funds without accounting for CGT when each property is sold.

A propos Marks' comment about refinancing, I think Chris wants to clear his debts, it may be an age thing but that is what I would also like to do, there comes a time when refinancing ad infinitum loses its appeal in spite of the advantages especially as the debts have to be paid on death, with substantial debt the options are limited. I used the life insurance calculator provided and would need cover almost to the total loan value for my beneficiaries to refinance loans which are currently extremely favourable. In which case it would be better if they were paid.

Mark Alexander - Founder of Property118

6:02 AM, 1st January 2013, About 11 years ago

Puzzler - I note your comment "I used the life insurance calculator provided and would need cover almost to the total loan value for my beneficiaries to refinance loans which are currently extremely favourable." I can't see how that is possible, please explain and provide the numbers please which returned that particular result. If that was the outcome I fear there may be in glitch in the algorithm somewhere.

PS - I am assuming this is the life insurance calculator to which you are referring? >>> http://www.property118.com/index.php/life-insurance-calculator-buy-let-landlords/

Chris Knock

4:41 AM, 2nd January 2013, About 11 years ago

Ok thants for all the comments, refinancing is or benificiary conciderations are not on the cards, the advise on reducing the CGT has been taken onboard and is being followed up. The aim is to cash in and retire.
Rgds Chris.

Mark Alexander - Founder of Property118

7:12 AM, 2nd January 2013, About 11 years ago

Good luck and all the best Chris

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