Capital Gains Tax

Capital Gains Tax – Sale of residential property


From 6th April 2020 if you sell a residential property you must report and pay CGT within 30 days of the completion of sale. Failure to do so could result in interest charges and penalties. This does not include sale of your own principle private residence!!

The reason we are blogging about this (18 months after this rule was introduced) is because many individuals still do not know or have forgotten about this rule, leaving individuals at the mercy of HMRC’s penalties.

How much capital gains tax will I pay?

A basic rate Taxpayer will pay 18% on the gain and any amount of the gain falling into the higher rate the Taxpayer will pay 28%.

For the 2021/2022 Tax year the Tax free allowance (in addition to personal allowance) is £12,300 meaning Taxpayers can earn a gain up to this amount without paying Tax.

Calculating CGT on property

In order to calculate a capital gain on a property, you will need to gather:

  • the dates in which you purchased and disposed of the property;
  • confirmation of the property purchase price and sale price;
  • any allowable costs, from renovation works to stamp duty and legal fees; and
  • confirmation of any tax reliefs you are eligible to claim.

The gain calculation can be complex and the rules change each year- ensure you appoint an accountant to calculate this for you.

If you have sold a property, other than your private residence, since 6th April 2020 and you have now reported this to HMRC, please contact our office where we will be happy to quote you for this service.

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