Capital Gains Tax (CGT) is a tax on the profit from a sale of an asset that has increased in value and is a key consideration upon the disposal of a property. In our practice, the issue of CGT will arise on a regular basis, and MG Group can advise you in this complex area.
CGT is generally chargeable if you are a UK resident (including those who are temporarily non-resident) on gains made on the disposal of capital type assets. In practice, the most common disposals will be of land and buildings, but the tax would equally apply to the sale of other assets such as paintings and works of art.
In many cases, there will be reliefs available on the disposal of a property – and there will also be planning opportunities available. Capital Gains Tax is a very wide area, and there are a number of key factors and reliefs to consider.
CGT on property disposals
From 6 April 2020 UK Government has changed the Capital Gains Tax legislation for UK property sales. If you’re a UK resident and sell a property, you now need to report it to HMRC and pay any CGT due within 30 days of the disposal (completion date).
If you are a UK resident, you may need to notify HMRC and pay CGT when you sell or otherwise dispose of:
- A property that you have not used as your main home
- A holiday home
- A property that you have rented out
- A property that you have inherited and have not used as your main home.
In relation to the disposal of property, it is possible to claim reliefs to minimise the amount of CGT due – but it is important to note that not all of the reliefs will be available on each disposal. Some possible reliefs include:
- Compulsory purchase order rollover relief
- Only or main residence relief
- Lettings relief.
If you are planning to sell your property, contact us today to see how we can help. We can then recommend the best course of action to optimise your position.
If you are a solicitor or an estate agent, get in touch with us to see how MG Group can assist.