CGT avoidance 'not just for MPs'
IT is not just Members of Parliament who can take advantage of tax exemptions on second homes, say chartered accountants Haines Watts of Huntingdon – there are perfectly legal ways for everyone to keep the taxman at bay. Some MPs have obviously got thems
IT is not just Members of Parliament who can take advantage of tax exemptions on second homes, say chartered accountants Haines Watts of Huntingdon - there are perfectly legal ways for everyone to keep the taxman at bay.
"Some MPs have obviously got themselves a bad name for the way they have seemed to be avoiding paying taxes, but many of these are perfectly legal and open to anyone, such as the way Hazel Blears paid no capital-gains tax on the sale of her second home for �200,000, with a �45,000 profit," said Simon Laskey of Haines Watts, which frequently use these rules in tax planning for clients who have a second property.
Mr Laskey added: "All UK taxpayers are entitled to a capital-gains tax exemption on one principal private residence, which is usually your main home. However, if you own more than one property, you can nominate any one as your private residence even if it's a second or third one.
"As Capital Gains Tax on any profit arises only when a property is sold, by timing your elections and claims carefully, you can often avoid paying the tax. In fact, the exemption applies for up to three years after you move out, so you may claim it even if you're living in a different property at the time of sale."
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