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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I OWN AN INVESTMENT PROPERTY IN BELFAST AND HAVE SUBMITTED

Customer Question

HI,
I OWN AN INVESTMENT PROPERTY IN BELFAST AND HAVE SUBMITTED SELF ASSESSMENTS SINCE LETTING THE PROPERTY COMMERCIALLY.
IN 2013 MY HUSBAND AND I DECIDED THAT IT WOULD MORE SENSIBLE TO HAVE AN INVESTMENT PROPERTY CLOSER BY.
WE FOUND A SUITABLE PROPERTY IN OCTOBER 2013. THE BELFAST PROPERTY WAS STILL OCCUPIED BY A TENANT SO THE PROPERTY WAS PURCHASED USING A 75% MORTGAGE WITH THE REMAINING 25% FUNDED UTILISING OUR RESERVES.
THE MORTGAGE ON THE WORTHING PROPERTY WILL BE CLEARED WHEN THE FUNDS FROM THE BELFAST PROPERTY ARE FORTHCOMING. A PURCHASER HAS BEEN FOUND, HIS MORTGAGE IS IN PLACE AND IT IS HOPED THAT THE DEAL WILL COMPLETE IN SEPTEMBER.
AS ANY CAPITAL GAINS WILL BE USED TO PURCHASE THE WORTHING PROPERTY, WILL C.G.T. APPLY?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Gain from sale of investment property would be chargeable to CGT.

Business asset roll over relief would apply if the property is a commercial property and you reinvest proceeds from sale of first property into another property.

Business Asset Rollover Relief means you won’t pay any tax until you sell the new asset. You may then need to pay tax on the gain from the original asset.

https://www.gov.uk/business-asset-rollover-relief

On the other hand gains from sale of a residential property that is let would not qualify for asset roll over relief unless it is a furnished holiday let, I'm afraid.


I hope this is helpful and answers your question.

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