Multi-faceted Tax implications?

by Readers Question

8:00 AM, 21st August 2019
About a month ago

Multi-faceted Tax implications?

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Multi-faceted Tax implications?

We have decided to extend the Leases on 3 of our properties – Using our savings. Leases are short and will cost circa £50,000 apiece. We are Husband & Wife Joint Owners)
Buying/extending the Lease now, and having everything in readiness for a sale in the latter half of 2020 is the nimblest way as synchronising the lease extension and Sale can be cumbersome!

Subsequently we will sell those 3 and extend the leases and pay off the mortgages on the 4 remaining properties, which we intend to retain!
To sum up 7 Lease Extensions and 3 Sales done in Phases over a 2½ year timescale .

This has multi-faceted Tax implications – We would grateful for the opinions of our 118 contemporaries.

• Can we simply do this and reimburse ourselves the expenditure of 3 Leases (£150,000)
• Is this necessary expenditure of benefit in CGT calculations?
• Are there any neater solutions!

We look forward to any replies- as they will inform us of possible pit-falls etc.

Corral



Comments

Mark Alexander

9:54 AM, 21st August 2019
About a month ago

-
Hi Corral

Lease extensions are considered to be capital costs which increase base costs for CGT calculation purposes, so that's the first piece of good news for you 🙂

Two of HMRC's best kept secrets are their suberb online CGT calculators - see https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/properties/ or if you are non-resident then see https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/

You can use these calculators both anonymously and free of charge.

Whether or not there are better options for you to consider I cannot say without going through a full tax planning consultation process with you - see https://www.property118.com/tax/


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