SELLING A PROPERTY at LOSS/PROFIT - CAP GAINS ALLOWANCE

SELLING A PROPERTY at LOSS/PROFIT - CAP GAINS...

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Hi, I'm thinking of downsizing my property portfolio yr by yr to take advantage of cap gains allowances. I am single with a 12 yr old daughter to care for and think about her future. I have a partner who does not live with me, but we are thinking about it.
 
1) IF I sell one of my properties at a loss in tax yr 14/15, can I bring forward that loss to another property that makes a profit in the following tax yr 15/16?
 
2) Is there a better tax strategy out there. I would be open to selling the lot off but want to minimise my tax, will entrepreneurs relief work here? 
 
Thank you,
 
Kev

Replies (7)

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By duncanedwards
21st Dec 2014 15:43

What are the numbers?

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RLI
By lionofludesch
21st Dec 2014 15:49

Question 1

First of all, I'm not seeing how selling a property at a loss uses your CGT allowance.

Secondly, you gave us a lot of largely irrelevant information about your personal life and then skimmed over the important stuff - like how much you're expecting to make as a chargeable gain.

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Euan's picture
By Euan MacLennan
22nd Dec 2014 10:39

Basic CGT rules

If you make a capital loss, you must first set it against any capital gains of the same tax year and hence, obtain relief for the loss.  If the net gain is less than the annual exempt amount (£11,000 in 2014/15), it is tough - you do not have the option to carry the loss forward and leave just the gain to be covered by the annual exempt amount.

If you can carry a capital loss forward, it is automatically deducted from the next available capital gain, but only to the extent required to reduce the net gain to the annual exempt amount for that tax year.

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By Anthony123
22nd Dec 2014 17:24

CGT?

as stated above we are a bit low on facts.

But you need to be aware that in some situations selling off property might be treated as trading not a transaction liable to CGT. This might particularly be the case if you developed the properties to begin with even if you then let them out for a while.

Definitely one for your accountant I think.

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By AAProperties
23rd Dec 2014 00:26

As I've been a Landlord renting properties (some of them refurbished), I haven't sold any so don't think I would qualify as a trader? Unless I just quickly sold off all my properties??? I just want to each yr sell even if it is a loss. but some of the properties will have profit. IE, flat bought for 35k will sell now in Wales valleys for 28k, house bought for 43k will sell for 55k. So my question is can I offset the loss of the flat (tax yr 14/15 ) against the gain of the house (15/16).

Thank you.

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RLI
By lionofludesch
23rd Dec 2014 11:49

Yes but, once you've paid out solicitors fees and estate agents fees, the £12k gain on the house will pretty much be covered by your annual CGT allowance anyway.

Good plan to realize one gain a year, by the way.

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By AAProperties
26th Dec 2014 14:43

I've had enough of BTL's (buy to lets), and I know I have losses when remortgaged years ago. BUT I do have gains. So if I use my head I can minimise what CGT I have pay, but I have to plan it properly and tax planning is the way to go. Does anyone know anything about Entrepreneurs Relief when a property trader sells his whole portfolio and his tax is only 10%??

Just want to say thank you for your replies, 

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