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Aston Lawyer
Aston Lawyer, Solicitor
Category: Property Law
Satisfied Customers: 10550
Experience:  LLB(HONS) 23 years of experience in dealing with Conveyancing and Property Law
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My partner and I have a second property. It was my partners

Customer Question

My partner and I have a second property. It was my partners flat before we met. The mortgage is a residential, interest only mortgage in my partners name alone. the flat was purchased in 2002.
It was my partners only property and she lived in it on and off until 2008 For the last 6 years its been let out to private tenants, for 3 years of those years, and let to a family member for the the remaining 3 years.
The flat was originally purchased for £97.5k, we owe £85k on the mortgage. The flat has recently been valued at £165k.
In April 2012 we bought a house together in both our names. We have a residential repayment mortgage on this family property. We live in this property full time.
We would like to release some equity from the flat (approximately £38k) which would mean transferring it to a buy-to-let mortgage. We would like to use the equity to fund buying another family home for us to live in.
The question is, would we be subject to capital gains tax if we release some equity?
Submitted: 2 years ago.
Category: Property Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

I am Al and am happy to assist you with your enquiry.

If all your partner wishes to do is to re-mortgage the Flat, there will be no Capital Gans tax (CGT) or indeed any type of tax to pay.

CGT is only payable on any disposal of an asset, and a re-mortgage does not count as a disposal.

I hope this assists and answers your question, but please let me know if you require any further clarification.

Kind Regards

Al

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