Cash out unit trust to buy new house, the re-buy units after selling old house

[Steve_Harris]

Hi - I am in the situation where I will buy a new house and may not sell my old house at the same time. In this case, I'd need to fund the new purchase without getting the funds from the purchase of my old house.

I do have enough capital to buy the new house outright, but this would mean cashing in all of my investments that are in a unit trust. This would lead to a capital gain, but then I would get the funds in from my house a month or two later and could buy exactly the same units back. It would be annoying to pay the CGT as this would be in the same tax year, so I'd only use one CGT allowance etc and most would be at 20%.

A complication is that I'm now part of a growing small firm (at least I hope we are growing!) with very small income so that I could cash out investments over time and invest differently, and use the CGT allowance each year and pay any extra at 10% given my low income for now. Cashing out in one year means paying most at 20%.

Is there any obvious way around this? I'm aware of the 30 day rule - would this work like this in the scenario below?

I cash out £300k (say) from a unit trust and use this to buy the new house.
I get the cash from the sale of my old house 25 days (say) later.
I buy the same units in the same unit trust for £300k (or whatever it would cost, given market movements).
I'm in the same position as if I never sold the units.


Another possibility, especially as 30 days isn't a long time, would be getting a mortgage in the new house for £300k (less than half the value). This wouldn't cost much, and the rates would be very low, but I don't have enough income to get a mortgage. I did hope that having enough capital to cover the mortgage in full and a house worth more that the mortgage would mean I could get one, but after calling around they only care about income.

Any thoughts would be great!

[someone]

I think the term you're looking for is 'bridging loan'

They are aimed at (amongst others) asset rich people who need short term finance.

The rates and fees are often very high and they need approaching with care but I suspect they're less concerned with income levels given sufficient assets. BICBW

[Steve_Harris]

The problem is as you say though, the set up costs are high as is the interest rate. I'm going to talk to my bank - I suspect that I won't be able to get a mortgage even though there would be zero risk to the provider, but I'll do some digging around about bridging loans.