1. Visiting from the US? Why not try DIYnot.US instead? Click here to continue to DIYnot.US.
    Dismiss Notice

capital gains tax, permanent residence and the taxman

Discussion in 'General Discussion' started by div69, 29 Mar 2006.

  1. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    :idea: Just curious about how this works. Lets suppose I am willing to buy a house do it up then 6 months later sell it. As it is my main residence I'm not going to pay capital gains tax on the profit. Then I move on to the next one for 6 months and so on until I'm tired of doing it. Can the taxman tell me I cannot do that or it is perfectly within the rules?
    Please let me know what you think...
    Thanks
    p.s. the minimum period, before you can sell without having to worry about tax was 6 months wasn't it?
     
  2. Sponsored Links
  3. WoodYouLike

    WoodYouLike

    Joined:
    14 Nov 2004
    Messages:
    7,710
    Thanks Received:
    215
    Location:
    Kent
    Country:
    United Kingdom
    Don't think he can touch you, but on the other hand you will pay VAT on every item/service you buy to revamp the house.
    So if you're thinking of making a 'living' out of property development why not become a proper company, VAT-registered and the buying and selling process of the houses will become part of you business: no Capital Gain tax (just Corporate Tax if you make enough profit ;))
     
  4. hermes

    hermes

    Joined:
    3 Jan 2006
    Messages:
    1,782
    Thanks Received:
    0
    Location:
    Derbyshire
    Country:
    United Kingdom
    And income tax.
     
  5. WoodYouLike

    WoodYouLike

    Joined:
    14 Nov 2004
    Messages:
    7,710
    Thanks Received:
    215
    Location:
    Kent
    Country:
    United Kingdom
    Yes of course. :oops: Depending on the 'status' of your company also of course: Ltd versus self-employed.
    (Ltd only on wages, self-employed on profit)
     
  6. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    Hm,... in my limited experience with companies, taxes etc I guess I'll need to talk to an accountant (I did read your comments in the DIY accountant thread, most useful, those guys should know what's best) and also read a bit more about business types.
    Something to think about, no, a lot to think about ;)
     
  7. WoodYouLike

    WoodYouLike

    Joined:
    14 Nov 2004
    Messages:
    7,710
    Thanks Received:
    215
    Location:
    Kent
    Country:
    United Kingdom
    div69, there's a lot of free advice (and sometimes free money!) out there. Try a Business Link (not sure where you are based, but Business Link Kent has been very helpfull to us in the beginning). Also, if you're from around here (Kent) I can recommend a really good accountant/business adviser who will help you out truly, not just sending invoices everytime you call him :D
     
  8. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    yes, Kent, that brings happy memories, did my degree over there, in Canterbury... thanks, I may give it a try, may be I'll move back to Kent when the time's right.
    I'm now based in Herts. I know for sure we have Business Link around here, I even helped my mrs write an essay about them recently...
    :LOL:
     
  9. pickles

    pickles

    Joined:
    12 Nov 2005
    Messages:
    718
    Thanks Received:
    0
    Country:
    United Kingdom
    If you do it often enough the revenue will say you are trading and tax you accordingly. I don't know exactly under what schedule but I have seen it happen. You might get away with it a couple of times but they will investigate you if you keep doing it.

    Don't under estimate the Revenue they are very good at what they do
     
  10. Sponsored Links
  11. hermes

    hermes

    Joined:
    3 Jan 2006
    Messages:
    1,782
    Thanks Received:
    0
    Location:
    Derbyshire
    Country:
    United Kingdom
    Apart from advice, they can find you free training and grants, where available. I still use ours from time to time after 7 years trading.
     
  12. joe-90

    joe-90

    Joined:
    28 Oct 2005
    Messages:
    31,284
    Thanks Received:
    1,062
    Country:
    United Kingdom
    I've been buying and renovating for ages. The trick is that I have one property as my principal residence and my partner has one as hers.

    We renovate them and resell after about 3 to 4 years and do it all again.

    We make about £40 - 50k tax free each year. Not bad for a bit of weekend work.

    Never had a problem with the tax man. Many people move on every 3 to 4 years.


    joe
     
  13. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    I was looking for a similar comment (from the other side of the coin), thanks for that pickles.
    Well, I don't know much about taxes and don't even want to try to under/over estimate the Revenue. All I know is that mostly money make this world ticking and that the Revenue sets the rules how to get it from us.
    I liked what that accountant said on that TV program("No tax please I'm a millionaire") few weeks back, he said(paraphrased): "I do nothing illegal, I follow their rules, I simply have better strategy playing the game".
    Did you see that program, I found it very interesting? Anyway, I haven't read the tax rules yet, but suspect it won't be an easy read, that's why asked you guys to share your views and experiences. If you say you've seen it happen it means there is a condition written somewhere, so it would be nice to know where to look for it. :LOL:
     
  14. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    not bad at all m8ty, for a bit of weekend work...it would be nice to drop it to every 6 months though, won't it?
     
  15. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    not sure if I can post live links (so I've killed that one), but this one is a very good resource for people interested in the housing market (just go to the root of the web site), it also has the tax manual pages here: h_t_t_p://w_w_w.voa.gov.uk/instructions/Index.htm
    (just remove the underscores from the address above) ;) :LOL:
     
  16. pickles

    pickles

    Joined:
    12 Nov 2005
    Messages:
    718
    Thanks Received:
    0
    Country:
    United Kingdom

    The revenue will say you are trading and try to tax you under Schedule D case I, which I think is trading profits from self employment, they look for what they call "badges of trade" eg, quick turnover, short term borrowing, a background of similar transactions. It's the last one that will sink you the fastest, eg you can get a way with it once or twice but if you are buying and selling within say a year and you keep doing it sooner or later they will investigate you.

    Note the comment by Joe 90 above, he claims he 's getting away with it, but says he only moves every 3 years

    If your really serious go and talk to an accountant
     
  17. div69

    div69

    Joined:
    29 Dec 2004
    Messages:
    51
    Thanks Received:
    0
    Country:
    United Kingdom
    Yes, I'm sure they'll have something like that :rolleyes: , but what if I'm employed and not self-employed? There will be another trap for that case too...
    ... we can speculate for ages here... I think you are right, lets ask the professionals...
    thanks pickles
     
Loading...

Share This Page