Terrible time with council tenant and shock at how law treats landlords15:32 PM, 9th January 2019
About A week ago 40
My wife and I own a semi-commercial property where the ground floor commercial unit is occupied by a mini cab firm and the 2 x upper floors provide for a separate self contained residential unit. I have a commercial loan on the property as a whole, which recently, after five years of being on an interest only mortgage basis, has changed to capital and interest repayments with a 20 year remaining term, with no early repayment penalties.
The ground floor commercial occupier has recently made an interesting informal offer to purchase the whole property from us, but accepting the offer would mean quite a hefty capital gains tax liability even after applying our annual exemption amounts. There have been no capital improvements that we have made to the property to help reduce this amount either.
I would like to ask your readers if they have any suggestions to minimising the CGT liability.
Some of the thoughts I have had include clearing the outstanding loan amount with our own savings, and splitting the freehold title to create 2 x long leasehold interests. Would selling off each long leasehold interest individually make any difference to our CGT liability? I could perhaps also take advantage of selling each interest in different tax years and take advantage of our CGT exemption amounts over 2 tax years? I’m also aware that we could “show” that we have lived in the residential part and attempt to minimise any CGT liability that way, but I don’t think that is a path I want to take.
Any advice warmly appreciated.
Mr M Gujral
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