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bigduckontax
bigduckontax, Accountant
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My wife and I both own homes in addition to the matrimonial

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My wife and I both own homes in addition to the matrimonial home. I rent out mine as a short hold rental and my wife rents hers out as a holiday let. She also uses it part of the time or use it when friends stay the night. My wife bought hers before we got married and it is registered in her own name.Can we offset £11,500 per property against capital gains tax and can my wife reduce cgt because she also uses it for personal use? I take it that the money used to do them up prior to sale plus buying and selling costs can be used to offset cgt?Thanks,John.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, John, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You are going the right way, but not completely right as the Annual Exempt Amount (AEA) is 11.1K, not 11.5K. Yes, improvements eg installation of double glazing, central heating, extensions etc do inflate the acquisition price for the CGT computation. Routine maintenance does not as it is allowable against rental income. To qualify as a furnished holiday letting the property must be available for commercial letting to the general public for at least 210 days in a 12-month period and it must actually be let for at least 105 days in that period. Full details can be found here: http://www.wiseandco.co.uk/Furnished-Holiday-Lets-Tax-Relief.html#sthash.Qqb2xOpP.dpuf Whilst your wife cannot benefit from reducing her CGT exposure due to her occasional occupations she does benefit from Entrepreneurs' Relief on ultimate disposal which limits the tax to a flat rate of 10%. Alternatively, if she uses the fungs generated to buy another holiday letting property she has the alternative of rollover relief which postpones CGT. You can find a very goo summary, albeit a tad long, from Wise & C Chartered Accountants here: http://www.wiseandco.co.uk/Furnished-Holiday-Lets-Tax-Relief.html I do hope that I have been able to shed some light on the position.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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