Disposing of a property
If you are disposing of a property that has been your main residence throughout the entire period of ownership, there is no Capital Gains Tax to report or pay.
If you make a disposal of land or property that has been held as an investment, or let for any period throughout ownership, you may need to report the disposal of the property to HMRC on a “Capital Gains Tax on Disposal of Residential Property” return. The filing deadline for the return is 60 days from the date of completion. Payment of any tax due must also be made by this date.
It is vital that all capital costs incurred are correctly claimed to ensure the gain (and the resulting tax thereon) is as efficient as possible. Such expenses include some that are often missed by the taxpayer (such as Stamp Duty Land Tax).
It's all in the timing...
Timing can also play a key role to minimising the tax burden, particularly if other capital disposals have already taken place in the tax year, thus utilising your Capital Gains Tax annual exemption.
The resulting rate of tax (of 18% or 24%, from 6th April 2024) is also dependent on your wider tax profile. So, you might find that engaging TaxGem™ (hi!) to advise you on your tax position and prepare the relevant return on your behalf may save you some money! (Probs to be honest!)
If you already file self assessment tax returns the disposal will also need to reported on your relevant tax return. Care must be taken to correctly record the gain and tax paid so as to ensure this isn’t double counted.
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Do you think you would benefit from TaxGem™ advising on your recent or upcoming property disposal?
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