buying property to let

[PAP]

If i own a house and want to invest in a property to let, do i need to pay tax on the rent and would i need to pay CGT if i sold it for a profit.
If so any way of avoiding the tax?

[Nigel Lord]

PAP

Profits from UK rentals are chargeable to income tax under Schedule A. There are various methods of mitigating the tax such as using spouse's unused allowances and lower rate bands, using a service company, or owning the property through a Limited Company. Advice should be sought.

Gains made on investment properties are liable to CGT. The best way to mitigate CGT on let property is to live in the property as your main residence for a short while thus qualifying for Principal Private Residence (PPR) Relief for the period of residence and the last 36 months of ownership, and for Residential Lettings Relief (up to £40,000). This would be doubly effective if you jointly own the property (2 x residential lettings relief and annual exemptions)

Please refer to me for bespoke advice.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk