help!! will i get screwed for CGT, want cash to start business

[bricks & morter]

can any one help on this? i have a flat that i have been renting out for 30 months, bought for 58k in 2000, it is now worth approx 110k .

i've remortgaged to purchace a second property to renovate which will be completed in a few months which at present is unhabitable, i live with my parents & have been for the 5 previous years

i want to release the equity in the first flat to start my own property investment company [ the equity remaining is approx 40k] , if i move into this first property [ the one i want to sell ] for a period of say 6 months [ pay council tax, bills , register the address with inland revenue etc] can i avoid CGT. If i have to declare any of this profit i will be unable to "roll it over" for my next project, starting my own company will entail giving up my full time job, so i need to give myself the best chance i can

thanks in advance , david

[demetris]

By moving to the first property and living in it as your main residence for 3 months will mean that when you sell it, the last 3 years of ownership will be exempt from CGT.

You will also be entitled to some taper relief that will reduce the taxable gain and your annual capital gains tax exempt amount.

Demetris Savva BA FCCA
http://www.tax-accounting-london.info
FREE Special Report on how to save tax written in plain language for small businesses and individuals, sent automatically to Subscribers to weekly tax and business advice FREE newsletters.

[Ian McTernan CTA]

You may be better off in the long run remortaging both your properties once the renovations are complete and lending the money to the property company rather than trying the 3 month tactic. The Revenue can review your intentions when looking at such a claim and if it was your intention to sell when you moved in then the PPR relief will be denied. Secondly, you have to examine the cash position of remortgage and renting out against the loss of around six months rental income.

You need professional advice as to the best way forward and also on the tax implications of starting and running the company, which I would be happy to provide.

Regards.

Ian McTernan CTA
McTernan Associates Ltd
ian@imcternan.com