| by Kenneth Chase | 21 comments

🌟How to reduce CGT when selling a buy to let property 🌟

Make sure you do not sell a buy to let property investment until you watch this video Hi everyone, my name is simon Michelle h and I you in the past of talking about capital gains time certain length what I want to use this video for now is to show you how you can minimize your Capital gains tax liability to zero whenever you’re selling a buying select property investment That’s right. You can minimize your cap gains tax bill to zero He says totally optional in terms of paying czt now Before I own these caveats, that’s funny. That’s not to say that you have a tax liability On your tax return and you simply don’t pay it. What I’m describing to you here is how you can minimize the capital gains tax Liability on your successful means and then painting tax on dispersion aquatics So hopefully let’s say let’s go through an example of how that is indeed possible All right, so what is capped against times well captor gains tax is a liability from hedge Martine that is Divine fine, his sounds proceeds about buy-to-let potting Less the acquisition cost less any refurbishment costs are being capitalized now that’s giving you a profit which is then taxed at the range of 18% for basic rate tax payers and 28% for high rate taxpayers and in the middle of that you’ve got another reducer called a capital gains tax Annual allowance and every person is given that and in this section here in question. It’s 12,000 pounds So what that means is you could make twelve thousand pounds with a profits earning a buy-to-let policy and you would not have to pay any capital gains tax liability any excess of that twelve thousand pounds would be subject to – – Okay, so let’s go through an example of capital gains tax liability and we’ll look at it from the worst case scenario and then we’ll Kind of look at different solutions that you might want to put into play So the first one is this particular scenario? Where you’ve got a property it’s worth four hundred fifty thousand pounds Bob. You’ve solved it for four hundred fifty thousand pounds Clearly you’re not taxed on that so what we need to think about is one, what is the cost of turning that property so you may have been on an estate agent you May have listed in yourself You may have a professional valuers to try and help you get a value All of those type of costs may help you to reduce that and the profit that you made on the property indeed when you first purchase the property you have the acquisition of the building now one thing I would always say to you is this is When people talk about scene YouTube they think about the property purchase cost But they forget to introduce these solicitors fees of buying the coffee They make the world the would’ve paid stamp duty man’s house as well Which is the genuine cost of buying that property? Which house you for men CGT? Perspective to minimize the profit that you are making but it’s so surprising of how many people do forget to add in SDLT and indeed. There is another cost refurbishment What if you had a property and is in give updated States you couldn’t rent it out And what’s trendy some guys? So you did it up and you got it selectable state while those costs would not have been offset against your protein them Those cost would be capital in nature and would help you to reduce your season team on disposal of the property Which is this scenario? So let’s go through an example here of how CGT is calculated Anyway, so this way we’ve got this 450 those pounds we’ve gone to the sales fees we’ve got the acquisition cost of SDLT legal fees here and Now we’ve got a profit as well. Now that profit is now what I would call Taxable profit, but we’ve got one thing to take off yet and if you recall This is where you have your capital gains tax annual amount and we need to take that down which now gives us this taxable profit So now we’ve got a taxable profit of 220 thousand pounds after purchase cars legal fees Sdlt and indeed our CG 2 annual nouns and this is 220 thousand pounds now as a high rate taxpayers That’s why we focus that time. He’s taxed at 28% now you might be watching this video thinking well, this guy doesn’t always talking about it’s clearly twelve twenty percent and unfortunately when George Osborne made these duty reductions on most assets he decided not give it to you that’s right if you residential property investments unfortunately reduce that CGT, so we’re stuck at there’s 28 cent level so you can now see maybe but the 61,000 capital gains tax liability Because something 20% tax challenged that’s a lot of money That you don’t really want to be spending on page 2 HMRC So, do you have a capital gains tax liability which is going to cause you pay in the future if you have please type in yes, and Describe your situation in the comments box If you’re interested to hear your stories and for me to kind of understand and how can I help you best going forwards? Alright, let’s talk about a solution Shall we there’s no pre talk map problems as there and I did say at the beginning of this video That there is a way of not paying capital gains tax at all And I’m now sounding like a complete fraud and I give you the example before So let’s talk about solutions then and let’s get straight to it The first one you can do Is that you can take one of your bikes net property investments and then you can bypass that to your charm via a trust That’s right. You can take a bind to net property from you and then move it to Your siblings so your son your daughter right and How do you do that? Well, you use a trust environment Now what I would say to you, first of all is that this particular property cannot have a mortgage on it? so if you’ve got a mortgage that does need to be paid off to tweets unless You want to just keep that spot in your own name and I left my team problem. I’m a CGG puppy It’s not gonna help you. So let’s do something about a pair for mortgage If you can’t if you compare the mortgage and you transfer it to your sibling It means that you’ve got a 90 transport now this all masses Okay, before we go into the detail the caveat is you’ve not done a nighttime Transfer before we have what we call a lifetime transfer a lot of three hundred twenty-five thousand pounds For IHT purposes you transfer assets of that value. There’s no I in team challenge Okay, so on and minimize your tax liability as much as possible So if this is the situation you can see quite clearly that this property one of the properties but we’re looking at here is Below the fridge of 25,000 pounds. So it does mean that the profit that we have Well, actually we just move that to our siblings and it would reduce our ITT lifetime announcer reducing the touring to 25,000 pounds down by that amount And you still got that amount to play with in the future what it does mean is that there is no Capital gains tax charge that’s all Go you can transfer an asset to your child and new CD – Okay, so this is whereby we talked about transferring assets to your loved ones But now on to talk about another situation here if you don’t want to give your children an asset, or You simply don’t have any children to processes onto which is equally possible You might want to reduce using Duty builder. Well, you can do it because as we can see by this Description here. You’ve got in Captain gains tax based on the game Which is the game less your CGT annual allowance? Well, if we take that game after your CT announced and you invest that into in E is which stands for enterprise investment schemes or a VC T or an SE is which is seed funding and enterprise investment schemes or VC tears I forgot to say Boeing’s venture capitalists trust and those types of investments have a great mechanism because people government want you to invest in those type of Schemes, and what they will allow you to do is minimize not easy to build in full now before I get started or any further buttons in this video I am NOT an IFA or a wealth manager, so I ask you please Make sure that you contact an IFA or wealth manager. You can trust with your family financials – this guess these type of investments I can’t talk about them from a performance and how much you might wear Norah Don’t lose you need to have that good conversation with an IFA or what manager so please go ahead and do that after this video in the meantime Because you’ve now invested that money in Against an EIS and SCRs or a vzt It does mean that you don’t have a capital gains tax liability on Disposing of your property so it is a way on moving for one type of investment to another without having to pain sea duty, which is totally unusual because you can’t sell a residential by intimate property and buy another residential pottery Portfolio or project a man gets some sort of tax relief. You just simply cannot do it but in this example of investing – he is Se is peas and cheese. You can mitigate your CGT liability all together so hopefully that’s given you some idea of how you can reduce your Seenu – has this video being useful has this video at least shown you of ways in which you can reduce your Captivate stance even a little bit or even down to zero If you found this useful And you’re going to use one or two of these strategies then please type in the comments box below With how you’ve been using strategies if you’re still sitting there thinking well, how do I minimize that I’ve got some questions? I’m not quite sure about this then make sure that you type those in the comment box below and I will answer those within 36 hours don’t forget guys to press the notification button below the subscribe button to make sure that you do not miss any time on your loading video and Please be sure to join me on Monday evenings at 7 p.m. Till 8 p.m. Where I will be answering your protein vestment questions and Your property tax questions to help you build wealth and reduce tax. I look for to seeing you there


Sam A

Jun 6, 2019, 2:39 am Reply

Hi Simon, is it possible to reduce CGT by selling property investment via delay completion?

Drive Stolic

Jul 7, 2019, 12:45 am Reply

Hi Simon great stuff! quick question, what happense if i have the property under SPV limited company. can i just resign and get the money from the buyer and assign him as director ? will i be entitled to pay CGT then ?

danger mouse

Jul 7, 2019, 8:11 pm Reply

Hi Simon, I was told by a mortgage broker that if I remortgage my buy to let property and remove all the equity and then if I sell it after 2 years. The CGT will be based on only the remaining equity left on the property. IS that true or some bogus advise?

Michael J. Freeman

Jul 7, 2019, 12:19 am Reply

Thank you for your clear and comprehensive presentation.

James Cole

Jul 7, 2019, 9:45 pm Reply

Hi Simon, would it be legal for an individual to sell property to a limited company owned by the same individual at a loss in order to create a net Capital gain loss to then off set a capital gain made on the sale of another property to an external buyer?

Kent Liu

Jul 7, 2019, 2:11 pm Reply

Hi Simon, If a property was purchased at a significant discount – say 50%, for CGT calculations, do I take into the actual discount price, or the market value price at the time of the transaction ?

Marvin Evans

Aug 8, 2019, 2:09 pm Reply

Surely you're just deferring CGT liability by investing in EIS, not removing the liability. Deferral of CGT is not available on investments in VCT or SEIS. Beware people!

Tam Jet

Aug 8, 2019, 11:58 am Reply

Hi Simon, quick question please, does the £ 12,000 CGT annual allowance apply to any assets ? Or only some kind?

Ali Amir

Aug 8, 2019, 12:23 pm Reply

Hi Simon, thank you very much for the detailed information.

I have a question on the IHT part (you assumed 220K of CGT being saved if an IHT declaration was made).

Is the 220K gain, arising on sale, be attributable to or nominated as IHT in (say for eg) a child's name, even after the property has been sold?

Or does the declaration of the property as IHT need to made BEFORE the actual sale (if sold immediately after sheltering this property under IHT, the disposal proceeds would equal transfer value and hence there wouldn't be any CGT?).

Appreciate the clarification.


Kent Liu

Aug 8, 2019, 11:46 pm Reply

Hi, In an LTD, can company losses off-set against capital gains from sale of a property to reduce the tax liability ? So for example, if there are losses brought forwards from previous years, and then this year a property is sold at a gain, can the two off set?

Paul Symonds

Sep 9, 2019, 10:00 am Reply

If you sell a BTL 12 years after buying it and it was your own first and main home for 7 years before then moving and turning it into a BTL, is there a reduction in CGT for the 7 of the 12 years ie 7/12ths as was main home? I heard this somewhere that it might be the case? Great video by the way. Have subscribed.

Iman Ahmed

Oct 10, 2019, 12:21 pm Reply

I have setup my own limited company regarding property trading and investing.
In order for me to claim tax back on things like creating business cards via vistaprint, does my ltd company need to be VAT registered. And if so how do I go about doing this.

Iman Ahmed

Oct 10, 2019, 5:17 pm Reply

So just to be clear I can claim tax back on things like petrol costs etc when travelling for property related reasons ?

Iman Ahmed

Oct 10, 2019, 1:43 pm Reply

Hi @optimise accountant
In order for me to corporation tax back do the expenses have to go through my business client account ? ie paying for petrol, or can you claim tax back even if paying for costs of business through my personal account.


Oct 10, 2019, 9:46 am Reply

Surely moving the property to a new owner would incurr SDLT

Michael Illingworth

Nov 11, 2019, 12:02 am Reply

How does the annual allowance work? Clearly the allowance can and does change, but my question is do you have to claim it yearly, or is it automatically applied to your figures at point of sale. I'm quite new to property and so far when looking at capital gains tax all the illustrations I have seen only reduce the tax bill by 1x the allowance. I'm confused, is this an annual allowance or a one time allowance?

Michael Illingworth

Nov 11, 2019, 12:06 am Reply

My parents bought their home for approx £3,000.00, now it is worth approx £120,000.00 , granted the property was purchased over 50 years ago, but 50 x annual allowance would have a massive impact on any tax due. This is related to my previous question.

parweez khan

Dec 12, 2019, 8:16 pm Reply

Hi Simon very informative video, I have quick question i have buy to let property for 20 years brought for 27500 now is worth 130,000 buying and selling cost 4000 allowance 12000 I am on basic rate what is the cgt

James Trebble

Jan 1, 2020, 11:12 am Reply

Thank you really interesting video, We have a slightly different problem and I was wondering if you had any thoughts on it we bought a commercial property which we will be converting into six flats when we sell the flats will we be liable for CGT and is there any way to mitigate that? Thanks James

Ozgur Ozdemir

Jan 1, 2020, 2:22 pm Reply

Hi,Do partners have full personal allowance (12K each partner) in cases they hold the property with different percentages ie. 90% one partner and 10% the other one). Does percentage of ownership affect the amount of personal allowance?

Tony Chilcott

Jan 1, 2020, 10:27 pm Reply

Hi simon
Our main home is in a lifetime interest in possession trust. Which I understand allows us to maintain our RNB and RNRB thus giving us from April 2020 £1,000.000 before IHT is due. We also have a buy to let property which we want to pass onto our 2 sons. Is it better to do a straight transfer of ownership and hopefully after 7 years it would be free of the estate for IHT purposes or is it better put it into a trust. Thanks

Leave a Reply