Logo
Results 1 to 5 of 5
  1. #1

    Possibly the stupidest question ever...?!

    hi guys,

    I'm remortgaging and pulling money out from various property.

    Silly question i'm sure - but - I assume I do not have to pay tax on all this money (as it is a debt)?!

    Feels too good to be true! haha

    Sarah

  2. #2
    Correct!! No tax to pay on debt

    BUT - always remember that should you ever come to sell then you would have CGT to pay assuming the value had risen beyond your annual gain allowance. So never sell and never pay CGT...

    AND - if you remortgage above the original purchase price then the excess interest charges on the new loan cannot be offset against income tax unless it has been reinvested into the property business. Make loads, pull it out and go again = no detrimental tax treatment but spend some on a Ferrari and you won't get the interest element set off against income tax on the top slice.

    By the way...not a stupid question at all...not a lot of people know this and Mr Bence put me straight on the first point

  3. #3
    Thank you Richard - very nice too! Isn't this a lovely game to be in?! :-)

  4. #4
    Not a stupid question at all Sarah. Its always better to check these things than pay the price later.

    There will be no capital gains on the money pulled out from equity by remortgaging. This will only arise when the property is sold or transferred to another party.

  5. #5
    I was thinking more income tax than CGT but i think the answer is the same :-)

    Thanks all!

 

 

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •