Capital Gains Tax on UK Residential Property

You do not pay CGT if you are selling your main residence. However, any other properties you own could be subject to Capital Gains Tax on Property if you have made a gain. Examples of these include buy-to-let properties, business premises, land, and property that you have inherited.

In most cases, you won't need to pay CGT when selling the property you live in because you will be entitled to Private Residence Relief. This relief typically covers the time the property was your main residence, plus the final nine months of ownership, even if you weren’t living there during that period.

You pay a different rate of tax on gains from residential property than on other types of assets. Basic-rate taxpayers pay 18%, while higher and additional-rate taxpayers pay 24% on gains from residential property.

Working with experienced CGT accountants can help you understand which rate applies to your circumstances and ensure that all eligible reliefs are claimed, reducing your overall liability.

How Much is the Capital Gains Tax on Property?

If you sell a property in the UK that is not your main home, you might need to pay Capital Gains Tax on Property on any profit you make from the sale.

You generally won’t need to pay the tax when selling your main residence. However, if you're selling a buy-to-let property or second home, you may face a CGT bill. You might also be liable for CGT if your home is partially used as business premises or if you rent out a portion of the property.

You may be able to claim certain tax reliefs, such as Letting Relief or Private Residence Relief, depending on how the property was used during ownership.

To avoid overpaying or missing deadlines, it’s good to consult professional CGT accountants who can guide you through the complex rules surrounding Capital Gains Tax on Property, calculate your gains accurately, and handle the reporting process on your behalf.

Reporting and Paying Capital Gains Tax

You must report any capital gains and pay the tax owed by specific deadlines set by HMRC.

When you must report and pay:

• If you sold a residential property in the UK with a completion date on or after 27 October 2021, you must report and pay CGT within 60 days.

• If you sold a residential property with a completion date between 6 April 2020 and 26 October 2021, the deadline was 30 days.

• If you have other gains to report (such as from shares or unit trusts), you should use a Self Assessment tax return.

• If eligible, you may use the ‘real time’ Capital Gains Tax service to report by 31 December in the tax year after the sale.

Don’t wait until the next tax year to report gains on UK residential property sold since 6 April 2020; late reporting can result in interest and penalties. Whether dealing with shares or Capital Gains Tax on Property, timely action is essential.

Expert Tax Advice from Capital Gains Tax Accountants

Here at dns accountants, we offer specialist help on all areas of Capital Gains Tax. As qualified tax advisors and experienced CGT accountants, we assist individuals and businesses with:

• Reporting and paying Capital Gains Tax

• Understanding your Capital Gains Tax liability

• Calculating and reducing your Capital Gains Tax bills

• Clarifying Capital Gains Tax rates and annual allowance

• Offsetting gains with allowable losses

• Filing through Self Assessment tax returns

• Identifying potential tax reliefs

• Strategic tax planning

Whether it's Capital Gains Tax on Property, shares, or other financial products, our team of CGT accountants is here to guide you through the process and ensure full compliance while helping you minimise your tax burden.