Hi all
we found a cheap flat that needs renovation. It is very poor state, but has good potential.
What is the best setup to approach that given
we will by in both our names - husband/wife. We can utilize capital gains of up to ~£22 000 per tax year tax free. The profit will most likely be < £22000.
we have another property - 3% "fine" for 2nd home payable
we pay with our saved money (i.e. all taxes have been paid)
How do we approach this whole thing?
As personal investment - so we pay property price + stamp duty + renovation labour + materials = total cost. And then hope to sell for total cost + X where X < £22000 so no CGT.
As some kind of legal entity (ltd, ??), so we can claim the costs for renovation (and purchase?) and subtract from the profit after sale.
What is the most tax efficient way?
PS. If you have 1 property (property 1), buying a second one will cost you 3% more as SD. However if you sell the second property after say 6 months can you claim the 3% back. I know you can if you sell property 1 within 18(24) months, but can you do the same if you sell property 2?
we found a cheap flat that needs renovation. It is very poor state, but has good potential.
What is the best setup to approach that given
we will by in both our names - husband/wife. We can utilize capital gains of up to ~£22 000 per tax year tax free. The profit will most likely be < £22000.
we have another property - 3% "fine" for 2nd home payable
we pay with our saved money (i.e. all taxes have been paid)
How do we approach this whole thing?
As personal investment - so we pay property price + stamp duty + renovation labour + materials = total cost. And then hope to sell for total cost + X where X < £22000 so no CGT.
As some kind of legal entity (ltd, ??), so we can claim the costs for renovation (and purchase?) and subtract from the profit after sale.
What is the most tax efficient way?
PS. If you have 1 property (property 1), buying a second one will cost you 3% more as SD. However if you sell the second property after say 6 months can you claim the 3% back. I know you can if you sell property 1 within 18(24) months, but can you do the same if you sell property 2?
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