Capital Gains Tax (CGT) is paid on the profit or ‘gain’ you make when selling a property that has increased in value.
Most people are aware that when they sell their main residence no CGT is payable as the gain is covered by the Principal Private Residence (PPR) relief.
However, the rules are different on any second and subsequent properties so if you have a holiday home or you are a landlord or property investor, CGT is normally payable on any gain.
If you reside abroad, you will also need to pay CGT on any gains made from the sale of a property in the UK.
Until recently, you had just 30 days from the disposal of a property to declare it on your self-assessment return and pay the tax due.
However, in the autumn 2021 Budget, the Government announced an easing of this rule and, for all completions made on or after 27 October 2021, you now have 60 days from the disposal of the property to declare and pay CGT.
If you are a higher or additional rate taxpayer, you’ll pay 28% on your gains from residential property.
If you pay basic rate Income Tax, the rate you pay depends on the size of your gain, your taxable income and whether your gain is from residential property or other assets.
The various reliefs and allowances that apply to CGT on residential property mean that making this calculation and submitting the payment is not always an easy task, so taxpayers will need to begin preparations for CGT before the completion of the transaction.
How can Rotherham Taylor help?
We can assist you with all CGT computations, ensuring that you pay the right amount of tax on time, in order to avoid any late penalties.
We also provide a full tax planning service and can advise you on the most tax efficient of method of buying and disposing of properties.
Get in touch with us now to find out more.
