Homeowners may be able to use their property to save money, says Jennifer Hill in The Sunday Times. If you own a second home and are struggling to sell it, why not set it up as a holiday let? Run it for one year and you qualify for ‘entrepreneur’s relief’: the first £1m of capital gains is taxed at 10%, rather than 18%.
To count as a holiday let, the property must be available for at least 140 days, let for a minimum of 70 days, and not let to the same person for more than 31 days.
Another boon for business owners struggling to pay a mortgage is for, say, a husband to sell shares in a family firm to his wife equal to the loan amount outstanding. The wife takes out a loan to meet the cost of buying the shares and her husband uses the proceeds from the sale to clear the mortgage.
Because his wife has borrowed the money in order to buy shares in a private family firm, the full amount of interest on the borrowing qualifies for tax relief at her highest marginal rate. “So, interest repayments can be set against their other income, potentially making them big savings.”