Not the time to sell and will CGT ever come back down?

Not the time to sell and will CGT ever come back down?

13:29 PM, 16th May 2016, About 6 years ago 15

Text Size

I own a two residential properties which I let out plus my own home, all of which are in the West Midlands. I would like to move back down to the West Country where I lived some years ago. CGT

I would ideally like to sell all my properties in the West Midlands and buy two properties in the West Country – one in which to live and one to let out as an investment.

The difficulty is that with the recent huge increases in CGT I will be subject to large tax bills on the proceeds of sales on my two investment properties here. This will really hit the amount I have left to purchase in the West Country.

Am I better to sit tight for a while in the hope that CGT tax my come back down to a reasonable level? Or is the 28% rate liable to stay ?

I believe in America if you are selling an investment property with the intent of purchasing another one then the potential tax liability is negated if you buy within six months. This seems a lot fairer than our own punitive tax regime.

Any comments would be appreciated.



by Simon Misiewicz

10:37 AM, 23rd May 2016, About 6 years ago

I agree with you Ian and that is the advise we give to our clients. That said property does give you income before you retire. Those looking for capital growth should first look at pensions, especially SIPPs whereby they control the investments.

by Ian Watson

10:50 AM, 23rd May 2016, About 6 years ago

Reply to the comment left by "Simon Misiewicz" at "23/05/2016 - 10:37":

You are a fellow IFA, ( or Accountant ) I guess ? ! ?

I am an ex city Accountant turned IFA, and also a small scale landlord, so am not against BtL per se. I have them as part of a diversified overall retirement strategy, with many different asset types in place.

This is to give me flexibility in how I take funds in retirement, both income and capital , to reduce tax and avoid current and future Govt "raids" - eg. on Landlords ( see recent evidence) or on other wealth via the Banks ( see Cyprus in 2012 or so . . . ) .

Who knows if it will work, but I certainly don't want all my eggs in any one basket, whether that be property, stock markets or even cash !

by Chris wood

12:35 PM, 23rd May 2016, About 6 years ago

First , may I say thanks to all who have made comments and some suggestions.
One thing I have learned is that it is not straight forward and I think it would be wise for me to get the help of a professional who is up to date with the current state of affairs.
One of the properties I have lived in and the other I have not. This is also the one that has increased in value significantly as well. So if living in it for a while will help offset some of the CGT liability this may be a good thing to do.
Anyway, if someone could point me in the right direction of sourcing advise, I would appreciate this.

many thanks

Chris W.

by Alison King

14:12 PM, 23rd May 2016, About 6 years ago

Reply to the comment left by "Ian Watson" at "23/05/2016 - 10:30":

I find this remark surprising " it makes me wonder why most landlords are anti Pensions."
I have never heard or seen anything to suggest that. My property and pension strategy are very much intertwined, and I would expect that is true for many other landlords, especially those approaching retirement age.

by Ian Watson

14:49 PM, 23rd May 2016, About 6 years ago

You could well be right, especially in your obviously very sensible circle. However, from my experience as an IFA over the last 15 years or so, most landlords I have met have a strong disrespect for IFA's, and steer clear of anything involving the stock market.

They seem to prefer "tangible" assets, and invariably have stories of friends who have been ripped off by a sharp suited dude from somewhere with a swish office in the City. Undoubtedly, this can be justified ( eg. Equitable Life ) but it sometimes means they miss out on what could be to most, very sensible advice on the alternatives.

These are also sometimes the very people who come to Accountants and IFA's bemoaning the taxes involved in the Buy to Let business and want to find ways around them, which is of course dangerous to say the least.

By all means be / stay involved in the residential property letting business, but be aware that Govts of the future may well ramp up the taxes and that there may well be more flexible and tax efficient ways to prepare for retirement, as you seem to be already.

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?


Landlord Tax Planning Book Now