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If you sell an asset for a profit, then you will have to pay Capital Gains Tax (CGT). Property is no different.
How much you actually pay then depends on two things:
You can simply use our Capital Gains Tax calculator to see what your tax bill could be:
Your total capital gains tax (CGT) owed depends on two main components:
Your overall earnings determine how much of your capital gains are taxed at 10% or 20%.
Our capital gains tax rates guide explains this in more detail.
In your case where capital gains from shares were £20,000 and your total annual earnings were £69,000:
You pay no CGT on the first £12,300 that you make
You pay £127 at 10% tax rate for the next £1,270 of your capital gains
You pay £1,286 at 20% tax rate on the remaining £6,430 of your capital gains
Sure! You won’t have to pay Capital Gains Tax on property when:
If you have let out either part or all of your home for a while, you can also apply for letting relief.
This will be the lowest of:
Simple! If you share ownership of the property, you will both benefit from the £12,300 Capital Gains allowance.
You can nominate which one is your main home. It doesn’t have to be where you live most of the time.
Bear in mind, married couples and civil partners can have only one main home between them. The other property will be classed as a second home.
If it has increased in value since you bought it, then yes. You can read more about CGT when gifting a property here.
Until April 2020 you had two options:
However, the rules changed in April 2020. All UK tax residents who sell property for a profit (except, of course, your home) have to use only the Real Time Capital Gains Tax Service.
How the real time service works:
This means that you won’t need to file a self assessment unless your income changes significantly during the year (there are different CGT rates for basic rate taxpayers and higher rate taxpayers), or if you have another reason to file a tax return (for example, self-employment income).
Don’t worry, it can be confusing! Let one of our accredited accountants talk you through Capital Gains Tax. Just book a consultation here!
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