Everyone in the UK who owns more than one property should watch this. Learn how to use private residence relief to reduce your CGT. How did MPs save tax on selling their second homes as exposed in Daily Telegraph May 2009?

hello my name is Adrian Houston and today I will talk about private residents relief and the capital gains reliefs that MPs get on second homes how you can get them to everyone has a capital gains exemption on their main residence their principal residence the effect that has is to mean that if you buy your house four hundred thousand bonds and you served for two hundred thousand Pines there's no tax and that's an important principle that means that most of us have no hassles when we sell our house we don't have to put anything onto your tax returns and with no tax to pay where things get a bit more complicated is if you have a second home and in May 2009 this came home to roost for a lot of enemies who were getting paid public money to run their second homes but were them somehow avoiding capital gains tax when they came to sell that second home so I want to explain to you how that works and what the MPs did was in fact entirely legitimate from a tax point of view the Inland Revenue for HM Revenue & Customs as a snide on allows you to nominate which home will be treated as your main residence this is done no matter you write to your tax office and this might be your home that you live in London Friday or perhaps a weekend home and so for the MPs who are using both their London for one of their constituency home they can make a decision which one they want to nominate that is perfectly legal the way it works is that you sent this letter to your tax office and you say that from a particular date I wish they're dressed beloved we treated as Miamian residents for capital gains tax purposes that then means when you come to sell my property some or all profit that you make will be tax-exempt it will be covered by principal private residence relief let's take for example the situation where you own a house for ten years but after five years you make it your main residence you send it not election that means that for five years out of town is treated as your main residence so if you make again on the sale of that property of one hundred thousand Pines then only fifty thousand of it half would be taxable that leaves fifty thousand that's not taxed and your tax bill will be based on your fifty thousand taxable less your annual exemption which is about ten thousand pounds and that is noticed at 18 percent what the MPS in the spring of 2009 were criticized for what's what was known as flipping and that meant that they were flipping their residences from one to another there me an object in doing this was to be able to get taxpayer-funded allowances for their London home and then after it in a while change their parliamentary election so that their second home became their constituency home and then they got more taxpayer fondant allowances but what they were also doing was manipulating the capital gains mechanical actions that meant that they were maybe nominating one house as their main residence and then when it suited them changing to another each Aronian customs will not have any particular problem with that so long as they haven't they used both of them as their main residence they make up for evidence of occupation maybe utility bills maybe Bank stems credit card statements going to that address but probably most people in the situation of MPs would have correspondence going to each of their address for you and me this means we have to be careful that we don't nominate an inappropriate price for instance that would not be the judgment to nominate as your main residents a rental property that was constantly left over to other tenants that's not going to be your main residence unless the revenue were to ask for evidence you will be a sticky wicket but apart from that this can be used for for example holiday homes and it might be about from braces approach to get some of your bank statements credit card statements etc adjust to that woman for a period of time so hope today's talk has clarified for you are you the capital gains private residence relief can work now hire can be of benefit to those who have more than one home and not just MPs thank you for this you

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