Property Tax Essay Example | Topics and Well Written Essays - 3000 words

Property Tax - Essay Example Assuming that David is having more than property in UK, assuming that David new property at 12, Mudchute Court is second property owned by him or one of the many properties he owned, then, for reducing his capital gain tax, he can claim the following as a deduction from the capital gains earned on the disposal of 12, Mudchute Court namely fees paid to solicitors, all professional fees paid to estate agents, Stamp Duty Land Tax (SDLT) and expenses incurred for improving the property. Further, as David lived in the new property bought for few weeks, he can term it as â€Å"principal private residence† to avail exemptions between properties he owned as he is planning to sell it after two years. However, David has to establish some corroborations that he lived there for some time albeit even it is for short-term. If David resided in that house even for some weeks in the new property which should be his second or one of the many properties owned by him, which facilitates him to write off the past three years of capital gains when David decides to sell it after two years. Thus, David should elect the new property as his residence and should inform the Income-Tax Authorities within two years of purchase of 12, Mudchute Court. It is to be noted that the choice can be changed by the David if he wants to select some other property he owned. If he fails to inform about his â€Å" principle private residence â€Å" to tax authorities , then , he would be losing hi s chance to claim exemption from capital gain taxes under the above scheme4. It is to be noted that just living in the property for avoidance of capital gain taxes can prove to be costlier to David as held in Court of Appeal in HRMC5 case where the defendant employed an intricate chain of derivative transactions to minimise capital gain tax on  £10.7 m. The court opined that any