Could one remortgage a property to take the equity out of the property, then sell the property six months later without paying capital gains tax, as there would now be no equity in the property, as this has been removed six months previously?
Arthur Weller replies:
Unfortunately, what you have written is not correct. Capital gains are based on the difference between: (a) the sales proceeds; and (b) what the asset was acquired for originally, or, if it was acquired by inheritance or received as a gift, the market value when acquired, as per HMRC’s Capital Gains manual. The equity that the taxpayer has in the property is irrelevant.