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  • Tax

    Analysis of the impact of Tax changes on landlords

    (02-09-2015 05:49 PM)fanio Wrote:  So if you could contribute £20k over the next 15 years for a (say) £100k capital gain you wouldn't do it? Seems crazy to me.


    Yes it mught work with the gains but there is no guarantee!
    Would you really pay so money every year just to stay in the market for possible gains!!!??
    It surely must be too higher price to pay for some possible gain in future years!!
    Not many LL could afford to gamble that sort of money every year!
    Nope when costs outweigh income time to sell up or massively deleverage if you can!!!?
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    Well done Phil,

    Great article - very clear and well thought out.

    I too hope the government takes heed! That's all we can hope for.

    Meanwhile, I for one have already started selling to deleverage our portfolio.

    Cheers,

    Angela
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    Author of The Complete Guide to Property Strategies and The Complete Guide to Property Investing Success
    Learn more at http://www.completepropertysuccess.co.uk

    I also post property updates on my Facebook Page

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins

    Showing my ignorance about tax issues here
    But if you deleverage and then sell presumably and hopefully you make a large gain
    Now my question is whether the CGT is calculated from the original purchase price compared to the debt paid down
    Doesn't this mean that CGT will be calculated from the deleverage debt amount to the sale price!!?
    Which would be more gain than had the debt remained the same as at original purchase
    Pardon my obvious lack of knowledge about such tax issues!!!!
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    Hi Paul,

    The capital gains tax is calculated simply from the sale price minus the buy price (as well as factoring in 'capital' costs at buy & sale) regardless of whether or how much properties have been remortgaged or indeed deleveraged in the interim.

    Some of our earlier properties indeed come out with a negative sum presently as they've been remortgaged a lot while bought originally for a little.

    Don't worry, I've got a spreadsheet that I've worked it all out on... overall, we are lucky and should be able to keep around 15 properties completely unmortgaged (so long as the variables don't move too much!) or more with low gearing... the exact number we'll keep is yet to be decided.

    Angela
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    Author of The Complete Guide to Property Strategies and The Complete Guide to Property Investing Success
    Learn more at http://www.completepropertysuccess.co.uk

    I also post property updates on my Facebook Page

    "It is the small decisions you and I make every day that shape our destiny" Anthony Robbins