Holiday Home and Tax on any Gains?
28 July 2013, 06:41 PM
#1
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Holiday Home and Tax on any Gains?
As the savings rates are getting really silly now, I am tempted to buy a place by the coast (I have been looking for a while, but this stupid fall in interest rates is driving me with new vigor!!).
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Last edited by pslewis; 28 July 2013 at 06:42 PM.
28 July 2013, 06:47 PM
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The Tories have made this possible for you to do this, you know?
Anyway, yes - I do it.
Have a crash pad in New York, a chalet in Val D'isere and a little beach house in Menorca.
Main residence is in the UK.
A little bit of Googling will give you your answers.
Anyway, yes - I do it.
Have a crash pad in New York, a chalet in Val D'isere and a little beach house in Menorca.
Main residence is in the UK.
A little bit of Googling will give you your answers.
28 July 2013, 06:52 PM
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Nice. Which part of New York?
28 July 2013, 07:08 PM
#5
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As the savings rates are getting really silly now, I am tempted to buy a place by the coast (I have been looking for a while, but this stupid fall in interest rates is driving me with new vigor!!).
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Stop being such a plank and ask your accountant. It's hardly rocket science and you aren't the only person in the country to own a second home.( Not that you actually own one yet, you've just been going on about it for about seven years)
Your accountant should be able to resolve this for you in about five minutes by email.
A potential solution that springs to mind is to have your first home in just your name and the coastal property in just your wife's name. You pay one council tax and she pays the other.
The properties should then probably be treated as a primary residence each for you and your wife.
Email your accountant, mine will respond to my queries even at the weekend
. )
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28 July 2013, 08:03 PM
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28 July 2013, 08:12 PM
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You do make me chuckle you lot ..... I have a poxy £400k to spend on a Holiday Home and therefore I must, simply must, drive an Aston Martin DB9!
WHY?
I buy what's best to do what I want to do ..... I have an MX5 for driving in the sun around country lanes, nothing comes close to this for its task.
Anyway, I am my accountant ..... I have read all I can read, and I still can't fathom the best way to jump - I had thought about the 2 owners thing where the wife is regsitered at one and I at the other .... but that generates other problems in itself.
I did think, because of the affluent persons who frequent these pages, there would be an answer out there .................. I guess the Scooby really has hit the Chavvie end of the street now?
WHY?
I buy what's best to do what I want to do ..... I have an MX5 for driving in the sun around country lanes, nothing comes close to this for its task.
Anyway, I am my accountant ..... I have read all I can read, and I still can't fathom the best way to jump - I had thought about the 2 owners thing where the wife is regsitered at one and I at the other .... but that generates other problems in itself.
I did think, because of the affluent persons who frequent these pages, there would be an answer out there .................. I guess the Scooby really has hit the Chavvie end of the street now?
28 July 2013, 08:29 PM
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I think most of the Subaru owners that use this site aren't looking for ways to save money on their tax bill, they're quite happy to pay their share. Someone has to support the less fortunate.
I know this is rubbish, but he started it.
I know this is rubbish, but he started it.
28 July 2013, 08:48 PM
#14
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Thread Starter
£400k is what I can get to with ease ... more is tied up in other pies, which must remain there to spread my risks.
To the poster above, I pay a vast amount in taxes ..... I, single handed, am supporting at least 30, 14 year old Mothers in liverpool - and their grandchildren!!
To the poster above, I pay a vast amount in taxes ..... I, single handed, am supporting at least 30, 14 year old Mothers in liverpool - and their grandchildren!!
28 July 2013, 08:56 PM
#15
As the savings rates are getting really silly now, I am tempted to buy a place by the coast (I have been looking for a while, but this stupid fall in interest rates is driving me with new vigor!!).
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
I think you know exactly what to do & this is just another wind up!
A good one by the way
28 July 2013, 09:17 PM
#16
28 July 2013, 09:47 PM
#17
Scooby Regular
You do make me chuckle you lot ..... I have a poxy £400k to spend on a Holiday Home and therefore I must, simply must, drive an Aston Martin DB9!
WHY?
I buy what's best to do what I want to do ..... I have an MX5 for driving in the sun around country lanes, nothing comes close to this for its task.
Anyway, I am my accountant ..... I have read all I can read, and I still can't fathom the best way to jump - I had thought about the 2 owners thing where the wife is regsitered at one and I at the other .... but that generates other problems in itself.
I did think, because of the affluent persons who frequent these pages, there would be an answer out there .................. I guess the Scooby really has hit the Chavvie end of the street now?
WHY?
I buy what's best to do what I want to do ..... I have an MX5 for driving in the sun around country lanes, nothing comes close to this for its task.
Anyway, I am my accountant ..... I have read all I can read, and I still can't fathom the best way to jump - I had thought about the 2 owners thing where the wife is regsitered at one and I at the other .... but that generates other problems in itself.
I did think, because of the affluent persons who frequent these pages, there would be an answer out there .................. I guess the Scooby really has hit the Chavvie end of the street now?
What do you mean 'I am my accountant'? You can't understand simple tax matters yet you don't spend a few thousand pounds a year on a professional accountant??
You are making a fool of yourself
29 July 2013, 06:51 AM
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29 July 2013, 07:54 AM
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29 July 2013, 08:13 AM
#24
Not sure if the law has changed but it used to be live in it for 3 years and it's classed as your main residence.
I'd actually like to know the genuine current solution to this, and if there are any timescales involved, although I'm not planning on selling now, but you never know.
Is the only way to do it to have the properties in separate names and what implications there are for this, I don't currently have an accountant.
Cheers Pete for starting this wined up, not thought about this for a while.
I'd actually like to know the genuine current solution to this, and if there are any timescales involved, although I'm not planning on selling now, but you never know.
Is the only way to do it to have the properties in separate names and what implications there are for this, I don't currently have an accountant.
Cheers Pete for starting this wined up, not thought about this for a while.
Last edited by ditchmyster; 29 July 2013 at 08:14 AM.
29 July 2013, 08:53 AM
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Actually the HMRC website is unequivocal - you're only entitled to relief on the period when it was your main residence....and full relief only applies if it was your main residence for the entire period of ownership.
You get full relief on the gain during last 3 years of ownership so long as it was you main residence at some point in that 3 years.
And in theory the split ownership with wife doesn't get you anything
You get full relief on the gain during last 3 years of ownership so long as it was you main residence at some point in that 3 years.
And in theory the split ownership with wife doesn't get you anything
If you're married or in a civil partnership and own two or more homes between you, any nomination (for main residence) must be made jointly. It must be signed by both of you. You're only entitled to Private Residence Relief on one home between you.
29 July 2013, 12:15 PM
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As the savings rates are getting really silly now, I am tempted to buy a place by the coast (I have been looking for a while, but this stupid fall in interest rates is driving me with new vigor!!).
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
Now, I won't be renting out the property - it will reamin empty unless we visit it to enjoy coastal living. There will be no mortgage, the idea is to get rid of some savings!
Assuming, as seems likely, I purchase for around £400,000 and use it for weekends and suchlike.
The main residence will remain where I am based now ...... for about 5 years, when I plan to move to the coast where the holiday home is.
Obviously with the sale of the mortgage free main residence and the holiday home I will be looking for something more substantial than the Holiday Home.
But, let's say the £400,000 Holiday Home is £500,000 in 5 years time I would be liable for CGTax on the £100,000.
However, if I move into the Holiday Home for a period of, say, 18 months and claim it as my main residence (which it would now be) what is the tax position? Can I sell it and 100% of the gain is tax free? Or do I pay tax on the gain whilst it was a second home?
I've looked all over and there is no definitive answer - even on the Government websites! There is a statement saying that I have to inform HMRC of the purchase within 2 years (but I cannot see why that would benefit me at all?). My Tax Return asks for other properties anyway!
I don't see why any gain should be taxed and any losses are born by me!
I did think I could move in as my main residence and therefore any profits would be tax free ...... but, I'm not too sure now? How long would you have to live there before it is classed as your main residence?
Anyone know, anyone doing this?
31 July 2013, 07:30 PM
#28
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Thread Starter
Actually the HMRC website is unequivocal - you're only entitled to relief on the period when it was your main residence....and full relief only applies if it was your main residence for the entire period of ownership.
You get full relief on the gain during last 3 years of ownership so long as it was you main residence at some point in that 3 years.
And in theory the split ownership with wife doesn't get you anything
You get full relief on the gain during last 3 years of ownership so long as it was you main residence at some point in that 3 years.
And in theory the split ownership with wife doesn't get you anything
I suppose, what I could do, is buy the final property of my life while still owning the Holiday Home ...... and have the Holiday Home as our main residence for 3 years and then sell - move into the other property and die there (so, I don't care about tax then).
It's not as clear as you make out I don't think?
31 July 2013, 07:33 PM
#29
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If I buy now and sell in 6 years time - after living in it for 1 year - I will not have any CGT to pay?
I'm not sure how they can work out what profit was made at what point in time ....... I'm still looking for an answer in plain English.
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