Capital Gains Tax

[ian1888ah]

Iv recently sold a 2nd property on which i had a mortgage and was rented out. To reduce the CGT on this sale, I understand that the legal cost of buying and selling property can be used to offset this.
Does anyone know if the interest paid on the mortgage can be used aswell?

[Matt_C]

What is capital gains tax exactly?

[Logo Hater]

Originally Posted by Matt_C

What is capital gains tax exactly?

Another method whereby the government take from you, what is rightfully yours.

[mason]

Originally Posted by ian1888ah

Iv recently sold a 2nd property on which i had a mortgage and was rented out. To reduce the CGT on this sale, I understand that the legal cost of buying and selling property can be used to offset this.
Does anyone know if the interest paid on the mortgage can be used aswell?

the interest should have been offset against any rental income that you gained in the years you were renting it out, therefore you have already had the tax benefits.

[Matt_C]

Isn't every tax?

Still not sure exactly what it is tho. Does it mean if I sell my house in a few years to move to a new house, I have to give the government some of the money I made on it?

Then when I buy the new house, I have to give them 1% of that houses sale price aswell?

That sucks!

Or is it only for people who sell houses they bought to rent out?

[IronGiant]

Originally Posted by Matt_C

Does it mean if I sell my house in a few years to move to a new house, I have to give the government some of the money I made on it?

No, but be wary of buying into a new Stamp Duty bracket or you will pay for the privelege of buying the new one

Moving up the property ladder is not taxed per se, they plan to get that all back in inheritance tax once the property is worth even more

Trading in property as a business is different.

Dave

[Mep]

Originally Posted by Matt_C

Isn't every tax?

Still not sure exactly what it is tho. Does it mean if I sell my house in a few years to move to a new house, I have to give the government some of the money I made on it?

Then when I buy the new house, I have to give them 1% of that houses sale price aswell?

That sucks!

Or is it only for people who sell houses they bought to rent out?

Simply put it's a tax made on profits from investment (could be property, stocks & shares, art, etc). Your main residence doesn't count as an investment, second properties do.

Your first £8,500 profit (or thereabouts) is not taxable under CGT rules and you can offset against losses in previous years. Also, Taper Relief will reduce your liability depending upon how long you have held the asset.

[Mac Man]

Originally Posted by ian1888ah

Iv recently sold a 2nd property on which i had a mortgage and was rented out. To reduce the CGT on this sale, I understand that the legal cost of buying and selling property can be used to offset this.
Does anyone know if the interest paid on the mortgage can be used aswell?

Possibly too late now but.... if you are married or living with someone you can transfer half the property into their name and you instantly get double the CGT relief