Capital Gains Tax (CGT) is something you have to pay if you sell anything at a profit. This goes for most things you buy. However, when it comes to property things are slightly different.
If the property is your home and you’ve lived there most of the time or have lived there within the last three years, you can claim Private Residence Relief on profit made from its sale. This means you won’t pay Capital Gains Tax. You must not have ever rented out any part of the house (having a single lodger does not count towards this) or used any of it solely to conduct business. You must also not have bought the property simply to make a profit. Similarly - married couples are only allowed to count one property as a main home at any one time.
There are a few other situations where you don’t usually have to pay CGT:
• If the property was a gift from a husband, wife, civil partner or a charity
• If the purpose of your business is to buy and sell property e.g., you’re a property developer. Instead you will pay Income tax (if you’re a sole trader or partner) and Corporation tax (if you’re a limited company)
• If a dependent relative lived in the property
Selling a property that is a rental, holiday let, land or inherited property means you can’t claim Private Residence Relief and may need to pay CGT.
Finally - if you’re not a UK resident then you will need to calculate your Non-Resident Capital Gains Tax using the government calculator online.
As cash buyers, we buy any property, in any condition, in any location. If you want to sell your property quickly or want to find out more about how we can help, then get in touch today. All legal fees are included in our service so what we quote you is what you’ll receive.