CapEx Properties

As A Seller of a Residential Property, What Do I Need To Know About Capital Gains Tax?

If you’re selling a property in England , you may have heard about Capital Gains Tax and may be wondering whether or not you’re liable to pay it. As experts in property, our team at CapEx Properties are on hand to give you all the guidance and information you need.

  1. Capital Gains Tax – An Overview

Capital Gains Tax (or CGT) is taxation on the profits if you sell an asset that has grown in value. This definition can be confusing, so here’s an example of how it works.

If you bought a property for £1000,000 and then sold it for £1200,000, the profit you have made is £200,000. That means you would need to pay CGT on the £200,000 profit, not on the full sale price of £1200,000.

  1. Do All Property Sales Incur CGT?

Not every property sale is liable for Capital Gains Tax. If the property you’re selling is your primary residence, you’ll automatically have eligibility for Private Residence Relief so long as:

  • You’ve lived in the property as your primary home throughout the entire period you’ve owned it.
  • Part of it hasn’t been let out (this doesn’t include having lodgers).
  • No part of the property has been used exclusively for business purposes.
  • Its grounds are under 5000sqm.
  • The property wasn’t purchased solely to make gains.

For these reasons, most sellers won’t be liable for CGT.

  1. When Must CGT Be Paid When Selling A Property?

If you’re selling a second home, you’ll usually need to pay CGT.

You’ll also usually be liable for Capital Gains Tax if you’re selling a buy-to-let London property investment.

If you inherit a property, you won’t need to pay any Capital Gains Tax until you decide to sell it, and if you’re gifting property to your civil partner, spouse, or a registered charity, no CGT is usually owed.

  1. How Do I Calculate Capital Gains Tax?

To calculate the amount of CGT you owe, you need to subtract the price you paid for your property from its selling price to work out the profit. The government website has a handy online calculator that you can enter this figure into to determine the amount you need to pay, but there are some considerations to take into account first, since they could affect how much you owe overall:

  • The Capital Gains Allowance.
  • Your share of a jointly owned property.
  • Allowed deductions such as estate agent and solicitors’ fees and home improvements.
  • Tax relief.
  • Special circumstances such as compulsory purchase.

We always recommend you consult a Capital Gains Tax professional who will be able to answer questions relating to your individual circumstances.

  1. Selling Your Investment Property

If you’re ready to invest in uk property, get in touch with us here at CapEx Properties. We can help you with all your buying needs, and as experts you can count on us to offer you an exceptional level of service. Give us a call today on +442039898010.

How to invest in property in the UK

So, is the UK good for property investment? Yes, resoundingly so. Investing in UK property can be extremely attractive to foreign investors. Rental demand in the UK is inordinately high and outstrips supply year on year, as the country cannot build the required number of new homes that it needs, to service the population. As a result, historical capital appreciation has been as much as double digits, year after year, so the right investment in the right area, certainly can produce a healthy, long term capital gain. 

A market as fast and competitive as this one can be difficult to navigate especially as a foreigner buying property in the UK. So, whether you are relocating to London or planning to invest in a buy to let property, CapEx Properties is top of its class when it comes to assisting you in making a sound investment with good solid returns. 

If you are interested in procuring a property investment in the UK, you can contact us by completing our contact form. An expert broker will get back to you within 24 hours to talk about your needs and specifications. CapEx Properties offers a tailor-made experience to avoid the worry and stress of navigating the UK property market and endeavours to find you the best property investment in the UK. CapEx Properties has helped countless foreign clients find their ideal property and we pledge to do the same for you. 

About Us

CapEx Properties is an independently owned property search/buying agency, assisting international clients with the search & acquisition of UK properties.

Contact Details

CapEx Investment Properties Limited trading as Capex Properties is a company registered in England and Wales. Registration number 13324508.
Registered address: 128 City Road, London, EC1V 2NX, UK.