Property Capital Gains
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If you sell a residential property that isn’t your main home (eg, a property you have rented out), you will pay Capital Gains Tax (CGT) on any gain that is over your annual Capital Gains tax-free allowance (£12,300).
This must be reported and paid to HMRC online within 60 days of the completion date.
In addition, if you are registered for self-assessment and complete a personal tax return, the gain will need to be included in your next tax return too. Don’t forget to include the amount of CGT you have paid on account already. You can find further guidance on including your capital gains and losses on your personal tax return, on the HMRC website.
Still a little lost? Let us do the work for you! Our expert knowledge in this area will ensure your Capital Gain is reported accurately and on time, claiming any reliefs you may be entitled to.
Our accountants provide a professional Capital Gains service to a high standard. We can guarantee that your CGT return will be accurate, giving you peace of mind that you aren’t paying more tax than you need to.
We will do the calculations and then, with your approval, we will submit your declaration to HMRC, informing you of how much tax is payable, and how to pay it.
Frequently Asked Questions
- Spouse’s Allowance – Consider having the property in joint names. If you and your spouse both own the property, you will get double the tax-free allowance (2x £12,300), reducing the overall gain.
- Tax Rates – Basic rate taxpayers pay lower CGT at 18% for, so if you’re a higher rate taxpayer but your spouse is basic rate, consider transferring all or part of the property into their name.
- Timing of Sale – if you have used up your CGT allowance already in the current year, consider delaying the sale until the new tax year begins on 6th April.
- Capital Losses – You should report your Capital Losses to HMRC, as you can use these to deduct against future gains. This can be done on your personal tax return. If you’re not Self-Assessment registered, you can write to HMRC to inform them of any capital losses in the tax year.
- Main Home – If you lived in the property as your main home for any amount of time, you will be able to claim Private Residence Relief for this period, so make sure you keep a note of the to and from dates.
Yes. If you sell a property that isn’t your main residence, and you make a taxable gain, you will need to report any gain to HMRC within 60 days of the sale. business.
You can report and pay your capital gains tax online through your HMRC government gateway account:
If you would prefer to leave it to a qualified professional, we can do this for you.
require a business loan, or you are applying for a mortgage.
If the property is jointly owned, you must report your own gain or loss. For example if the property is owned 50/50, you would report 50% of the figures on your declaration. A separate declaration would be needed for the other owner.
You will need to provide the below information when making your declaration:
- Address of property sold
- Date of sale
- Sale proceeds
- Date of purchase
- Cost of purchase
- Improvement costs (not already claimed as repairs)
- Stamp duty amount paid on purchase
- Legal fees amounts paid on purchase and sale
- Estate agent fees amount paid on purchase and sale
- Is the property solely or jointly owned
- Dates for any period of time that the house was your main home
- Any capital gains losses brought forward
- Any other capital gains in the current tax year from 6th April
- All income sources in current tax year from 6th April (eg, gross salary, dividends, rental income, etc)
You should make sure you keep all of the above important documents in a safe place, in case HMRC ever request them.
The tax rate of Capital Gains is currently 10% for basic rate taxpayers, and 28% for higher rate taxpayers.
The tax rate of Capital Gains on the sale of UK property is slightly different – currently 18% for basic rate taxpayers, and 28% for higher rate tax payers.
Once you have submitted your CGT declaration, HMRC will provide you with a reference to use when you make payment. This is different to your personal UTR number.
If you have a reasonable excuse, you can appeal the penalty. Instructions on how to proceed with an appeal will be found on your penalty letter from HMRC.
