Use our UK Finance guide and learn by experience. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
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Capital Gains Tax - Periods of Absence
A main residence can in some cases continue to be exempt from capital gains tax even when it ceases to be a main residence, so long as no other main residence is held. This can happen during: Periods of absence not longer than three years ; Periods of absence where the owner worked overseas; Periods of absence not exceeding four years where the owner was forced for job-related reasons to find other accommodation.
Capital Gains Tax Exemption - Calculating the Extent
If a property has been a main residence as well as having been, at some time a secondary residence, or rented out from time to time, and a gain is made on the disposal of the property, then the property will be said to have been exempt for a period of the ownership and the capital gains tax applicable to the profit made will have to be allocated accordingly. Also, for the last three years of ownership (36 months), the property is treated by the real estate capital gains tax laws as if it were a main residence, even though it may not have been. So, for a property owned for eight years, lived in for three and let out for five, capital gains tax would only be applicable to two years of ownership. 3yrs occupancy + 3yrs exemption(36mnths) = 6yrs. 8yrs ownership - 6yrs = 2yrs. i.e. The capital gain made on the disposal of the property would be multiplied by 2/8 to arrive at a final figure.
Capital Gains Tax Relief
Because of the need to take the cost of inflation into account, the Indexation system was used in the past. Basically this system, which was introduced in March 1982, allowed the cost of your assets or investments to be increased on a yearly basis in line with the retail price index, thereby reducing the value of capital gains made by investors and consequently, the amount of capital gains tax to be paid. However, the law changed on 6 April 1998 and 'Taper relief' was instituted. The indexation system still applies to property owned between March 1982 and 6 April 1998.
Reducing your house Insurance Cost
There are several ways of reducing your house insurance costs. House insurance companies are obviously prepared to lower their prices somewhat if you can lower the risk to them, and by doing the following, you can achieve just that:-
House Insurance - The Hidden Costs
Simply put, the cost of house insurance is equal to the premiums you pay, and this figure can vary greatly, depending on a combination of several factors. The most important aspects here are calculating your house insurance requirements and deciding on the type of house insurance policy you are going to employ.
House insurance exclusions
Rather than making a claim in terms of your cheap home insurance policy and receiving the bad news that your claim will not be met, either partially or in full, make sure that you are aware of any exclusions which may apply to your house insurance policy.
Household insurance (Home contents insurance)
Household insurance covers the contents of your home such as electrical appliances, CD's, clothing, food and drink, furniture and electronic goods. Most home contents insurance policies will cover the items against loss or damage caused by fire, theft and flooding and some will also cover accidental damage caused to these types of items.
Buildings insurance
Buildings insurance relates to the structure (your actual house) as opposed to household contents, and as such covers you in terms of structural damage to your house as well as insuring you against damage to permanent fixtures like toilets, bathrooms and fitted cabinets in kitchens, etc..
House Insurance
Regardless of whether you're a home owner or a tenant, you will need to hold some form of house insurance policy. Your home and cumulative belongings together, more than likely constitute your most valuable possessions and should, for all intents and purposes be protected by a house insurance policy against loss, theft or damage.
Capital Gains Tax Advice – Residential Property
What is capital gains tax, who does it affect and what does it mean to you? If you possess property which you are selling or can foresee yourself selling at some point in the future, you should be able to answer these capital gains tax UK questions. Thanks to our wonderful law-makers, the calculation of capital gain property tax seems to become more complex with each passing year and so you really do need, at least, a basic comprehension of capital gains tax. However, you would be doing yourself a great favour if you were to acquire a more in-depth understanding of capital gains tax as being aware of all the breaks and exemptions available to you will definitely prove to be advantageous.
