All you need to know about Capital Gains Tax on the sale of property in the UK.
Are you selling a property in the UK? Do you know how to report the sale of a house if it is liable for Capital Gains Tax?
Here are our answers to common questions.
What is Capital Gains Tax (CGT)
Capital Gains Tax is a tax that becomes liable when you sell a property that is not your main residence. This includes:
- buy-to-let properties
- business premises
- land
Are there any exemptions to paying Capital Gains Tax on the sale of a property?
HMRC states you may not have to pay CGT if the property is a gift to, or you sell it to, your husband, wife, or civil partner. Your spouse or civil partner will be liable for any CGT if they sell the property.
You may also get tax relief if the property is classed as a business asset. This is where you either use the property for business purposes or your business deals with the buying and selling of property such as a property developer.
How much is Capital Gains Tax?
In the simplest of terms, Capital Gains Tax will be due on the difference between what you paid for the property originally and the amount you gained when you sold it less certain expenses.
There are varying rules for special circumstances such as when you live outside of the UK and you only pay CGT on your share of any gains if the property is owned jointly.
There are also certain reliefs that may be applicable so it’s important to get professional tax advice.
At Maynard Johns Chartered Accountants we have an online Capital Gains Tax Calculator service where we help calculate exactly what you owe and submit the necessary information to HMRC on your behalf. You can also use the online calculator at HMRC to find out what you may owe.
When do I need to pay it?
When you sell a property that is liable for CGT, this must be reported to HMRC, and payment made within 60 days of completion of the sale of the property.
How do I pay it?
We have full details of how to report CGT to HMRC on our page Capital Gains Tax UK Property – How to report to HMRC
What if I don’t pay on time?
If you do not pay within the required time frame of 60 days from when the property was sold, you may become liable for a penalty where you will be charged interest on the amount of CGT owed.
Information on how much the penalties may be can be found on the HMRC website.
Where can I get help?
At Maynard Johns Chartered Accountants, we have specialist advisors to help with calculating how much you owe and submitting the necessary information to HMRC.
Get in touch now for an informal chat about how we can help on 01237 472071.