Is it worth converting BTL into Holiday Let for CGT?

by Readers Question

A week ago

Is it worth converting BTL into Holiday Let for CGT?

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Is it worth converting BTL into Holiday Let for CGT?

I am planning to sell at least 25 properties pre the full roll out of s24 and wonder if there is any benefit to changing those that I can, into holiday let’s for a while?

I pay 28% if I sell one now, but believe if a BTL is changed and run as a holiday let (following all the proper rules) the CGT if eligible for entrepreneurs relief can be reduced to 10%

I have three that could easily be converted and successful, but I see ex council homes being run as Airbnb and wonder if this is a technique other landlords are using to reduce their CGT liability?

Many thanks

Mia

Comments

Mark Alexander

7 days ago

Have you considered becoming non-resident before cryslallising all those capital gains? You could create a new base cost at the April 2015 valuation for CGT calculation purposes if you do this. How much tax might that save you? Would it be worth it to become a tax exile? Having done it myself, I can assure you that 300 days a year of sunshine and life in the Mediterranean isn’t too bad! lol

Also look at incorporation as part or whole of a restructure, perhaps even combined with the above.

There are plenty more solutions to consider too at http://www.property118/tax

Kenneth Fowler

7 days ago

Hi Mark
I lived in Florida for almost 6 years 2009 to 2015 but stupidly came back. Too much sun, cruising, yachting, golfing, travelling etc gets boring after a while lol 😆 we said for almost 5 years we would never come back but one day we got bored and headed home; you may find out what I mean in a few years time. However, If I had have known about s24 I possibly would never have returned but hey ho!!!
Not sure I want to leave completely again but certainly circa 6 months here and 6 months somewhere sunny for the winter would be very appealing. That is our plan this year so hopefully I won’t be busy selling too many flats distracting me from a better life.
I did consider the company route but I feel I need/want to cut my portfolio down to maybe 25 before considering this further. I am just done with having so many responsibilities! I enjoyed it before the government came gunning for me as it was no trouble, so much so that we did the same as you and ran the portfolio from abroad.

Times have changed, dare I say for the better????? Why the hell would I want almost 60 flats, 60 families and 60 flats to sell when I am too old to enjoy the money. This government drive to get me out of the business (oops it is not a business lol) is a blessing in disguise.

I have been consumed with all this nonsense for 2 years and have finally seen the light, in fact I would almost say I have the selling bug. I did worry terribly about the fate of my tenants but having a friend die just a few days ago only a few years older than me (54), I need to de stress my life and enjoy what I already have rather than what I might have in 20 years time if I hold firm.
You got me government but perhaps you did me a huge favour!
Still interested in possibly converting 3 suitable BTL flats to holiday homes to add to the one I have had running for a couple of years and selling at 10% cgt so love to hear from anyone doing this?
Ken

Reply to the comment left by Mark Alexander at 17/04/2018 - 13:40
I imagine running holiday lets from abroad would be far more difficult than normal tenanted properties.


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