CGT

[nomura]

Hi all,
I have a buy to let that i am planning to sell soon and I was wondering if I remortgage it before selling it i could this way move the potential gain to my saving and avoid to pay CGT on it???

does it work?

Many thanks

[Peter D]

Mortgages and CGT are not linked in any way. Regards Peter

[nomura]

The BTL CGT calculation is based on the purchase value - sale value -( shall I not deduct the mortgage value? )
thanks

[Peter D]

NO. Mortgages and CGT are not linked in any way. Regards Peter

[Peter D]

Acquisition costs and slaes and legal fees are deductible form the gross gain. Regards Peter

[mullet]

The BTL CGT calculation is based on the purchase value - sale value -( shall I not deduct the mortgage value? )
thanks

The mortgage value is part or all of the purchase value. So if you were to deduct that it would be counted twice. Think about it like this:

Buy for £200K with a mortgage for £150K.
Sell 3 years later for £250K.
Doing it your way that would be 250-200-150 = a capital loss of £100K. The correct result is a gain of £50K.

In the context of capital gains, mortgages are a "tax nothing".

[nomura]

Thanks

[Incredulum]

Unless of course the property is in a company which is held by another company and you are selling the bottom company and can make a pre-sale dividend of the mortgage. Big stamp savings as well.