Financial Advice ?

[slickmick]

I know someone who owns a part commercial and part residential property. If they sell it they have been told that they will get stung for 40% tax. Are there anyways around this ie: re-mortgage to release some equity ?

[CB Saint]

I know someone who owns a part commercial and part residential property. If they sell it they have been told that they will get stung for 40% tax. Are there anyways around this ie: re-mortgage to release some equity ?

 

Doesn't sound right - property is usually taxed under capital gains tax which is 18%.

[slickmick]

Doesn't sound right - property is usually taxed under capital gains tax which is 18%.

 

 

OK thanks.

But would there be any reasons against re-mortgaging to release capital, rather than selling and getting a big chunk taken out for tax ?

[CB Saint]

You could release capital by remortgaging but you will still eventually have to repay it. Also when the property was sold the tax will be calculated without taking any loans into account. The tax is only charged on the profit made on the property btw.

[Channon's Sideburns]

OK thanks.

But would there be any reasons against re-mortgaging to release capital, rather than selling and getting a big chunk taken out for tax ?

 

The ability to remortgage would also depend on the makeup of the property.

 

For example, most lenders don't like flats above takeaways. There may also be problems for example if the flat is above an empty shop.

[Whitey Grandad]

I've always thought it was CGT on the profit on the business part of the property. That's why if you're working from home you shouldn't claim relief for expenses on the business part.