Hi all, could anyone recommend an accountant to help me. I’m currently selling one of my properties and need advice about CTG (capital gains tax) and general taxation regarding BTL’s (buy to lets). Many thanks, Alex.
PEM Cambridge are reputable
Thanks Alumni_Accommodation, for the recommendation.
I would love to hear from Colin3 and Cath2. Many thanks, Alex.
NRLA partner with Rita4Rent.
Alex 15 it depends where your area is. I use" Thomas Associates" as my accountant Liverpool L2 4SJ. they have done my books for last 15 years . and their charge for years accounts have stayed the same for about 10 years !
Hi Alex. I’m in Derby, although location doesn’t make that much difference in these online days!
Main things to make sure you have to hand is the original cost, plus buying fees, stamp duty etc and details of any improvements since they all get deducted from the gain, as do selling fees (solicitor, estate agent etc).
You have to take care regarding capital (allowable for CGT) v revenue (deductible against rental profits) - I had a client with an HMRC enquiry on a sale - HMRC tried to disallow the whole of the new kitchen from the CGT calc, saying it was revenue. We conceded some and successfully argued some (they had replaced some units like for like, but had extended it too). HMRC shot themselves in the foot to some extent though, because what they insisted was revenue, we said, ok, we’ll deduct it from the rental losses to use in the future then, so they took with one hand and gave with the other.
Obviously, you can’t claim anything as capital that you have previously claimed as revenue.
Assuming you own them personally, you’ll get the first £12,300 tax free and the rest will be taxed at 18/28% depending on your rate of tax.
The key thing to be aware of is that you have to declare the capital gain and pay the tax within 30 days of completion, and it can take a while to register, so don’t leave it until you complete to start looking at it!
Hi Cath, many thanks for your help and advice. I’m based in Kent, but as you say, location shouldn’t be an issue. The property in question is owned jointly by myself and my wife. It’s currently on the market, but not yet sold. The solicitor that I have instructed to manage the sale told me that I had up to 3 years of CGT roll over relief, if I wanted to invest any profit in the purchase of another property? Do you work for an accountancy? If so, Could I call you? I need help with tax returns etc. Many thanks, Alex. 07702 812347.
If it is a residential let, there would be no roll over relief because it is for assets used within a trade. https://www.gov.uk/business-asset-rollover-relief.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg60260: “TCGA92/S152 confines entitlement to relief to persons (most frequently individuals and companies) carrying on a trade. The word trade is to be given the same meaning as it has for Income Tax purposes, see BIM20000+. Trade therefore includes activities such as farming and the commercial letting of furnished holiday accommodation.”
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Cath is absolutely right.