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  • Tax

    Equity vs income - tax/selling advice please

    Hi there. After my husband’s long illness/death I have a massive tax bill. In order to settle this I need to sell off some of the portfolio. Some of the properties have equity in the but low income and some have low equity and high income

    Can you please tell me , when calculating annual tax liabilities, would all the properties be lumped together and then income, expenditure and tax calculated or is it calculated per property?

    I ask because if it’s the former then would it matter what I sell?

    please be patient - I’m new to all this and trying to juggle all of this plus probate plus running his properties!!

    my overall objective I suppose is to ensure I maximise my income as now I’m on my own I need security for me long term and my family.

    Working out how to maximise income and minimise profits going forward is an ongoing question and battle that I’ve been seeking believes on on Property Tribe as one which I still haven’t got my head round.

    Thank you b

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    Hi

    Firstly so so sorry to here about your loss. I lost my father recently. Firstly you should be able to avoid paying inheritance tax.

    Although it's good to work out profit per property partly to see which properties are producing posiive cash flow or not. Assuming all properties are residential then in the end costs and income are lumped together.

    You shuld also read up on section 24 tax before selling any properties. Which part of the UK are you based in?

    Good luck

    Amjed

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    I’m in the south east. Yes all genned up on Section 24?and that’s why going forward I need to work out what I should do with my portfolio.

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    You really need to talk to an accountant to advise you. This is not a question that can be answered here


    Good luck

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    A portfolio review with all costs. To work out which to sell.  Get to accurate net profit.

    Rita 4 rent have a spreadsheet that can be used to collate information. Give them a call?

    Has the existing accountant helped?

    - HRMC have some guidance on self assessment and property section videos and chat online help.

    https://www.gov.uk/guidance/income-tax-wh...tal-income

    if pressure is building up,  and overwheming and causing stress - try and consider outsourcing some elements for breathing space at reasonable costs.

    Always remember what your late husband was hoping to provide.

    Properties to bring a better future for his family. 

    dont panic sell assets - I made those mistakes once upon a time

    You are not the only one to face an accelerated learning curve.

    https://www.property118.com/inheriting-pr.../#comments

    If you need any help, even if just to vent - Property tribes community is here.

    Wishing you stress free adjustment period.

    Investorsk8

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    Coming soon Investorsk8.com

    Wisdom - an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs. 


    Thank you. Please could you recommend who could do a portfolio review and help me with the following (which are all issues swimming around in my head):

    1. Look at all properties, their outstanding mortgages, depenption dates

    2. Equity vs income in each and as a portfolio and which (bearing in mind the above) to keep or sell

    3. Going forward, restructuring tax affairs to minimise tax and maximise profits

    i have spent money on various consultations and get different opinions from everyone. I just want to have someone look at everything, look at all my issues and advise me the best way forward.

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    are you referring to income tax when you say there is a massive tax bill to pay?  if the bill is high then the rentals must be doing ok.  rather than selling perhaps remortgaging would be an option?  if selling try the market place option on property tribes.

    you will need to make sure the tax bill is correct and that you are claiming for everything you are entitled.

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    The tax bill is high as my husband was ill before he died and didn’t file any returns. So it’s back tax.

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