Capital gains tax avoidance measures not worth the trouble
Many individuals choose to invest in the property market with the idea of letting out a flat, house or other building; however, many have concerns about minimising or eliminating capital gain tax. This tax, which pertains to investment property, is quite important to keep in mind.
Some individuals who buy a new property choose to live there for a period of time before putting it on the market once again. This is done as part of a sincere effort to avoid capital gain tax liability. In order for a residence to be exempt, the owner must actually inhabit it. This requires having necessary post, such as bank and electoral information, sent to the property’s address. There are a few work-related exceptions, which should be discussed with a solicitor.
Suffice it to say, it is quite unwise for a property owner to pretend to live at one of their investment properties. This sort of thing is typically found out quite easily. One hypothetical question that was posed to an expert recently involved whether a person who resided with a partner could use their investment property’s address to establish residency. The expert advised against this, citing the fact that tax officials become suspicious of such things quite easily. The overall advice, for those who must let property for income, is not to use deceptive means to avoid paying taxes for, in the end, capital gains tax avoidance is simply not worth the effort.
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