Chartered Certified Accountants and advisers - Bathgate & Aberdeen

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You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) property that’s not your home, for example:

  • buy-to-let properties
  • business premises
  • land
  • inherited property

The amount of CGT you pay depends on your income and the amount of profit you make. The basic rate of CGT is 18%, the higher rate is 28%, and the additional rate is 33.3%.

However, there is an annual CGT allowance of £12,300 in the tax year 2022/2023. This means that if you make a profit of less than £12,300, you will not have to pay any CGT.

Capital Gains Tax: what you pay it on, rates and allowances

You can also deduct certain costs from the amount of profit you make, such as:

  • The cost of buying the property
  • The cost of any improvements you have made to the property
  • The cost of selling the property

If you are selling a residential property, you should make sure that you understand the rules around CGT. You can find more information on the GOV.UK website.

Here are some tips for minimsing your CGT liability when selling a residential property in the UK:

  • Keep good records of all costs associated with the property, including the purchase price, any improvements you have made, and the cost of selling the property.
  • Sell the property within three years of buying it. This will allow you to use the full annual CGT allowance.
  • If you are married or in a civil partnership, you can combine your annual CGT allowances.
  • Consider investing in a property that is eligible for Private Residence Relief. This relief will allow you to sell the property without paying CGT, provided that you have lived in it as your main home for at least two out of the last five years.

There are different rules if you:

When to report and pay

You must report any capital gains and pay any money you owe by the deadline.

Date of sale (or ‘disposal’)
When you must report and pay
Date of sale (or ‘disposal’)When you must report and pay
If you sold a residential property in the UK with a completion date on or after 27 October 2021Within 60 days
If you sold a residential property in the UK with a completion date between 6 April 2020 and 26 October 2021Within 30 days
If you have other gains to reportIn the tax year after you sold or disposed of an asset if you use a Self Assessment tax return. If you’re eligible, you may be able to use the ‘real time’ Capital Gains Tax service to report by 31 December in the tax year after the sale