Reliable Tax Advice For Buy-To-Let Property Sellers

Before you sell a Buy-To-Let property you need to understand this …

Regardless of your reasons for selling, landlords must never act only on impulse.

Unfortunately, most do though.

They often worry for hours about whether to sell with tenants in occupation (in order to retain their rental income) but at the risk of limiting their potential buyer audience, or whether to sell properties vacant and risk long periods with no rental income whilst incurring unwelcome expenses such as maintenance, Council Tax and insurance. However, even after having weighed up all of that they often walk blindly into a trap that’s very dangerous to their wealth.

That trap is called Capital Gains Tax (“CGT”) and it often hits them like a speeding train when they least expect it. However, with careful thought, planning, and professional advice there are often a variety of opportunities to reduce or sometimes completely mitigate CGT.

For example: –

• Changing the ownership share of the property between spouses to fully utilise annual CGT exemption allowances or to pay the lower rate 18% of CGT as opposed to the 28% rate
• Timing your property sales to span tax year ends or to sell in years when you are more likely to be a lower rate tax payer
• Incorporation of your property rental business as a going concern, which can re-base the value on which capital gains are calculated by washing the gains out of properties into company shares so that you can sell some properties to pay down mortgages on others with significantly less and possibly even no tax to pay at all
• Emigrating to tax-haven which doesn’t charge CGT on overseas capital gains can be particularly efficient if a significant proportion of your capital gains occurred prior to 2015

If you wait until you’ve already exchanged contracts or completed the sale it’s too late.

The above list is by no means exhaustive either, so if you are planning to sell any or all of your rental properties please get in touch with us first by completing the form towards the bottom of this page.

Are you considering whether you should sell some of your rental properties, perhaps to pay down mortgages or become mortgage free?

If so, there may well be Capital Gains Tax consequences associated with this, HOWEVER, there may also be ways to mitigate this tax, some of which I have explained in the video below.

There are also reasons you shouldn’t sell all the geese that lay the golden eggs

There can be no doubt the UK will always have a Private Rented Sector and the property market will continue to be a safe haven for investment growth, so it is absolutely not true that all landlords will sell up regardless of what the media might tell us. In fact, there are newcomers to the market every day and our Landlord Tax Consultants are always pleased to help them create the most efficient ownership structures for their investments. Either way, whether you are buying or selling, we are here to help.