Property Tax Accountants

Residential property often forms a large part of an individual’s overall wealth. For those who manage to accumulate more wealth, a second home is a very popular investment. All the more reason therefore to understand the tax implications, particularly capital gains tax (CGT).

Principal Private Residence (PPR)

When an individual’s main residence is sold no CGT is payable because of the PPR exemption. Where there is only one property owned the position is generally straightforward. However, the exemption only extends to the house and garden and grounds up to “the maximum permitted area”, which is 0.5 hectares (approximately 1 acre).  If your house extends beyond this area then call to to find out what the tax implications are.

Purchasing of a second home

Significant tax planning opportunities arise where more than one home is owned. This is because an election can be made as to which of the houses is to be treated as the PPR on eventual sale. The PPR does not have to be the house which is factually the main residence, but it does have to be a residence, i.e. you have to have lived in or occupied it at some stage. There are significant tax savings that can be achieved if the election is correctly handled. We will be happy to help you through these decisions.

Buying to let

Generally, income from letting will be chargeable to income tax. There are tax exemptions to the letting of one room within your main home. Expenses of a revenue nature rather than capital nature are deductible from gross rents, e.g. general decorating, maintenance and loan interest.

JCS Associates are based in Fleet, Hampshire and can advise clients on capital gains tax and any other issues effecting property tax to clients across the UK. Call us today on 01252 812345