CGT confusion!

[HayEu]

Hi there

My husband and I own a number of B2Ls and are looking to sell a few of them and our own property to fund another business (land and a Ltd co).

If we sold the B2Ls in mind we would have approx £250k profit, and our own house sale we would have approx £450k, so £700k total. The business and land is costing £795k.

First question is can we reinvest the money from the B2Ls into the business (as it is land) and avoid CGT now? Obviously we know we'd have to pay one day, but we would like to avoid paying it now.

Secondly if we are partly funding from our personal home, how would it work paying CGT when we came to sell? Would we pay on a percentage? I.e. as we are using our own money, would we still pay CGT on that investment percentage?

I hope this makes sense!!!!

Thank you in advance

[AdamS93]

First question is can we reinvest the money from the B2Ls into the business (as it is land) and avoid CGT now? Obviously we know we'd have to pay one day, but we would like to avoid paying it now.

No, you will not qualify for any hold-over/rollover relief - buy-to-lets are not business assets.

Secondly if we are partly funding from our personal home, how would it work paying CGT when we came to sell? Would we pay on a percentage? I.e. as we are using our own money, would we still pay CGT on that investment percentage?

Any gain on the sale on your main residence will not be subject to CGT as long as you have lived there as your main residence throughout (with some exceptions). What you do with the money raised from the sale of your main residence is irrelevant - on the sale of the business/land purchased with the proceeds, the capital gain will be calculated as normal.

The best advice one can give, is to seek professional advice especially with the numbers involved.

[someone]

Hi there

My husband and I own a number of B2Ls and are looking to sell a few of them and our own property to fund another business (land and a Ltd co).

If we sold the B2Ls in mind we would have approx £250k profit, and our own house sale we would have approx £450k, so £700k total. The business and land is costing £795k.

It's not obvious from this but be aware that equity is not the same as profit.

Roughly speaking,

The equity is the amount left once the mortgage is paid off.
The profit is the difference between buying and selling price.

It is possible to be in negative equity but still have a taxable gain. It's also possible to have a lot of equity but a tax loss.