From: "Doug Ramage" 
Newsgroups: uk.finance
Subject: Re: Buy to let mortgages etc.
Date: Thu, 8 Jan 2004 15:56:08 -0000


"Tumbleweed"  wrote in message
news:3ffd6ec8$0$15341$afc38c87@news.easynet.co.uk...
> "Doug Ramage"  wrote in message
> news:btjbqv$7r48g$1@ID-34015.news.uni-berlin.de...
> >
> > "Li@m"  wrote in message
> > news:saaLb.9671$hl2.107476167@news-text.cableinet.net...
> > >
> > > "Li@m"  wrote in message
> > > news:u8aLb.9665$LD1.106968162@news-text.cableinet.net...
> > > > I'm thinking of buying a small flat and may or may not need to live
in
> > it
> > > > dependent upon if parents move. If i do buy it to live in it 
> > >
> > > sorry one futher thing..
> > >
> > > "The sale of any property other than your main residence attracts
> capital
> > > gains tax (CGT) so with a buy-to-let property some of your profit will
> go
> > to
> > > the tax man. More on this later. "
> > >
> > > Would this apply if living at home with parents?
> > >
> > >
> >
> > Yes. But the property would be exempt from CGT for the period(s) it was
> your
> > main residence - which it could not be when it is rented out.
> >
> > If you don't rent it out, but continue to live with your parents ( not a
> > good financial option, usually), then you can nominate which residence
is
> > your main one for CGT purposes - you would normally nominate the one you
> > own.
> >
>
> Is there any reason why he couldnt rent it out but also nominate it as his
> main residence. For example, if it was a 2-bed flat and he kep one room as
> 'his' even if he only occasionally slept there (and maybe had mail
including
> his tax mail delivered there also), would that be (a) OK legally, and (b)
OK
> in practice since how would they know?
>
> --
> Tumbleweed
>

(a) In theory, partial occupation should trigger pro rata PPR relief and
thus Lettings Relief.

(b) Under SA, the onus is on the taxpayer to calculate the CGT payable, if
any. The penalties (including imprisonment) can be high for
fraud/negligence. There are quite a few ways the IR can find out - one is
disgruntled tenants.
--
Doug Ramage

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