Capital Gains Tax is a tax you may need to pay when you sell or ‘dispose of’ a property that has increased in value. The tax is levied on the gain you make, not the total amount of money you receive.
At Hanley & Co. Accountants, this month’s blog offers a guide to Capital Gains Tax on property. For information, call us in Staveley, near Kendal on 01539 821869.
When Does Capital Gains Tax Apply to Property?
In the UK, Capital Gails Tax typically applies to the disposal of:
Second homes
Inherited properties that are later sold
Properties used for business purposes
Land or plots not attached to your main residence
Capital Gains Tax does not usually apply when you sell your main home due to Private Residence Relief. However, terms to apply.
What is a Disposal?
As well as selling your asset, a disposal can mean transferring it to a third party that isn’t a spouse, civil partner or charity.
Therefore, you may still need to think about Capital Gains Tax, even if you didn’t sell the property.
How much Capital Gains Tax will I pay on Property?
Capital Gains Tax is charged as a percentage of the profit you make when you dispose of the asset. The rate varies and depends on the type of asset you need to pay tax for, and the income tax rate you would normally pay.
Basic-rate taxpayers will pay 18% on gains, whereas higher-rate will pay 24%.
Reporting & Paying Capital Gains Tax
HMRC doesn’t automatically send you a bill for any chargeable gains, so you must report a Capital Gain and pay tax on it. You must report the gain within 60 days of completion, otherwise you may face a fine.
How Can We Help?
At Hanley & Co. Accountants, we can offer specialist Capital Gains Tax advice. We offer clear advice tailored to your circumstances. Whether you’re selling a second home, or disposing of an inherited property, we ensure your gain is accurately calculated.
If you require Capital Gains Tax advice, contact Hanley & Co. Accountants in Staveley, near Kendal. Serving across Cumbria, call us on 01539 821869. Alternatively, send us a message via our contact form and we will be in touch.
