I've a couple of questions relating to taxation of property if someone can help me. If you can point me to the relevant pages on hmrc then even better.
1. If you have multiple properties that you live in then you can
nominate one of them as your primary residence. Once you've done the
nomination you can change it at any time. So for capital gains purposes,
provided you make a nomination then it's fairly obvious how to calculate
any tax liability if and when you come to sell.
Additionally there is council tax to pay on an ongoing basis. You get
(typically) a 10% council tax discount for a second property and, I
believe, you do not get the 25% single person discount even if you are
the only person living there. So if you are a single person with two
properties you will get 25% discount on one and 10% discount on the
other. Does the primary residence (25% discount) have to match the
primary residence for capital gains tax purposes or are the two
2. If you have a rental business that has no borrowings then there is
capital in the business matching what was put in when the business was
set up. You can withdraw that capital by borrowing against the rental
property and any interest on the borrowing will be an expense that can
be deducted from the rental income. I've found the pages on hmrc for
this case. But does the borrowing have to be secured on the rental
property? If I have borrowings against another property can I, as a book
keeping exercise only, apportion some of that borrowing to the rental
property or do I need to get a separate loan and then use that loan to
pay off some of the borrowing on the non rental property?
- posted 7 years ago