Warwick

Indexation for CGT for individuals ceased after 5 April 1998. It has been replaced by Taper relief (non Business Taper Relief, unless the property qualifies as a Furnished Holiday Let). This starts at 5% after 3 years and rises to a maximum of 40% after 10 years. The Annual Exemption (£8800 for 2006-07) can be deducted if not utlised elsewhere (e.g. gains on shares). Mortgages are not relevant in calculating CGT. I can confirm that, as a Tax Consultant, I am coming across more and more people who erroneously think they do. And the net proceeds of sale may not cover the CGT either (if heavy MEWing has taken place). Another commom error is a parent giving a BTL property to his/her kid(s) thinking CGT cannot apply as he/she has made no gain from the gift. Unfortunately, CGT applies to "disposals" which includes gifts. Sometimes it takes a few years for this to come to light which can mean HMRC impose interest and penalties on top of the CGT liability.

You need to check what you have signed. Any change must be by consent (unless of the terms are illegal) - unless the LL has not told his lender about the tenancy. If LL enters unlawfully, you can eject him. Apply for Court Order etc. However, this may not be condusive to harmonoius relations.

Yes - Dr David Kelly springs to mind - be it suicide or murder.

Friend bought a studio flat near Cambridge for £69,000 in 1989, IIRC. Took until 1998 before he was out of negative equity and could sell it. Another bought a 4 bedroom detached house in Suffolk for £90,000 in 1989. Finally sold it for £72,000 in 1997.

The short answer is Yes. Vacant possession is not essential for a sale to take place. In fact, the property value may be greater with a tenant already in situ.

I spoke to a Valuer yesterday for a client who wants to purchase a BTL (despite my warnings to the contrary). He valued the property at £195,000, but conceded that for investment purposes its value was nearer £133,000 (I was using a Gross Yield of BoE + 2% and a monthly rental of £800). Another Chartered Surveyor said I was being too optimistic - he considered it should be a minimum of Base + 3% to give a value of ~ £116,000.

Nice analogy. Just visualising the pumped up muscles, before the body implodes.

I have had an Audi 80 and Audi 90 Quattro, both were still running superbly at 140,000 miles and 160,000 miles when I sold them. Neither needed any engine work (apart from tappet replacement), still had original exhaust and clutch. Oil and filter changed every 5000 miles was the main reason for no engine work, IMHO.

Except Ford own 33.4% of Mazda, IIRC.

I had an Audi S3 for 3 years and found it a reliable car - except when the rear near-side suspension arm collapsed with only 15,000 miles on the clock. At 1000 miles p.a., taxis/buses etc might be a better option (unless you are in the middle of nowhere)?

Mortgage approvals for house purchase may be the highest December 2003, but only 1000 more than October 2006 and 2000 more than September 2006.

No mention of the £260 million of mortgages then.

I have never bought any mp3 tracks - although I do burn them from my CDs for use outside the home. However, 99.99% of my CDs are bought via the Internet.

No, I am a "Bear" because I think that house prices will fall within the next 12 months. The point is that homeowner who has a property "worth" (say) £200,000 but with a mortgage of £200,000 is no better off than a tenant - and, in some respects is worse off. As the "owner", he/she gets to gamble (with borrowed money) - if it goes up then he/she wins.

The CGT rates are 10%, 20% and 40%. Which one(s) apply will depend on your income for the relevant tax year. Taper relief is also available after 3 years of ownership. If you rent out your primary residence, then you qualify for Lettings Relief (maximum £40,000 per OWNER), and the last 36 months of ownership are always exempt from CGT (even if rented out). Likewise if you live in your BTL property as your primary residence for a reasonable length of time prior to sale (say 12 months or more).

Not really worth the risk of trying to sell at the top of the market, when 40% of the extra of BTL gain is likley to go in CGT.

It would depend on the purpose of the further advance - if allowable, then the extra loan interest would be deductible from the rental income. True - but if you have more than one residence, you can nominate which one is to be your PPR - and change that Nomination as often as you wish. A Nomination for (say) one week could get you (up to) 3 years of PPR relief for the loss of only one week PPR relief on your other property.

Mortgages are not relevant for CGT. Have you read the Inland Revenue's Help Sheet IR283 which deals with CGT for private residences? It is downloadable from their website. http://www.hmrc.gov.uk/helpsheets/ir283.pdf

Sorry - misunderstood what you were getting at. But it is just as bad - as there is no CGT exemption for rented properties. So each property you flip will be liable to Income Tax. Unless you are suggesting to deceive HMRC, which is fraud. That can get you a big tax bill plus a possible stay at HMP.

If your PPR is rented out, then it ceases to be your PPR, as you are unable to reside in it.

The problem is there is no set period of time for occupation to qualify as "residence" - the Courts have said that it is "quality" not "quantity" that counts. IMHO, 6 months is probably too short - but it would depend on the exact circumstances. HMRC are unlikely to challenge the PPR (Principal Private Residence) exemption, if you have lived in the property for 12 months or more. If you "flip" the properties too quickly, not only might HMRC deny CGT status, they might consider you are a property developer and subject you to Income Tax (so no £8800 CGT exemption). Have you read the Inland Revenue's Help Sheet IR283 which deals with CGT for private residences? It is downloadable from their website. http://www.hmrc.gov.uk/helpsheets/ir283.pdf

Come the recession, even more financial services jobs will evaporate. Not a job I would recommend, unless it really appeals.

I started looking at BTL mortgages for clients in 1998, and there were not many lenders around - probably no more than half a dozen or so.

I made sure that my dad obtained written confirmation that the landlord's lender was aware of the tenancy - which the agent duly did.

No, the Yield is an Income one. No capital gain is being factored in, as that would be guesswork and may not even happen.