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Is there any way to avoid tax on a buy to let property, bought

Customer Question

Is there any way to avoid tax on a buy to let property, bought 1997. If I live here for a while will that change the tax situation? daughter also lived there for 4+ years.

Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

 

I presume that you are concerned about Capital Gains Tax (CGT) to which you will be liable on the profit on the eventual sale of a buy to let property. This is levied at 18% or 28% depending upon your income, including the gain, in the tax year of sale. The gain is the difference between the purchase price plus costs of purchase including stamp duty plus any improvements made, eg a new kitchen, installation of central heating less the net selling price, that is price less selling costs. Repairs and renewals are expenditure set against income when calculating the rental profits liable to Income Tax. CGTt may be somewhat mitigated by your occupation. Presumably you owned properties elsewhere and did not elect for your buy to let house to be your main or sole domestic residence? Your daughter's occupation is an irrelevance as far as CGT is concerned. There is an Annual Exempt Allowance of 11.1K available to offset any gain realised.

 

I do hope that you understand that the lack of information in your question, particularly regarding detail of other property ownership, makes it rather difficult to frame a fuller answer at this juncture.

Expert:  bigduckontax replied 2 years ago.
One point I should have mentioned is that CGT may also be further mitigated by Lettings Allowance of up to 40K. Again much more detail is needed here.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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