Capital gains tax on a residential property - you need to know this!

It is hard to keep up with the new financial legislation but this one you need to know so you don't get caught out!

Whenever you sell a residential property, even if it is your main home, you need a capital gains tax assessment. This could be just picking up the phone to an accountant or checking the tax legislation with HRMC online.

BUT WHY? Some capital gains on residential property need to be reported and paid to HRMC through a personal CGT account within 60 days of completion. This is a significant change to reporting it at the end of the tax year through self assessment.

A residential property includes a buy to let, holiday home, and in some circumstances your own home!

When you sell your own home you usually get a 100% relief on any gain as you have had it as your main residence for the entire ownership. However, if part of your home is a business, if you have small annex or basement flat that you let out, or if you have been away from your home for significant periods of time then you may also have a capital gain to report.

For a UK resident you only need report if you have a gain and tax to pay, if you are non-UK resident you must report all UK property disposals (see table below).

Capital gains tax reporting and record-keeping | Low Incomes Tax Reform Group (litrg.org.uk)

As an accountant I do not enjoy having to let people know bad tax news, I'd rather you get in touch, check your plans over and everyone knows upfront and in advance what the tax implications can be!