If you're a UK-based landlord looking to sell rented flats or houses, reach out to us for expert tax advice and services. If you've recently sold a residential property and owe capital gains tax, remember to report and pay the tax to HMRC within 60 days of the sale's completion.
Tax Returns for UK Residents
Tax Returns for Non UK Residents
Rollover relief can be utilized for furnished holiday lettings and specific trading assets, allowing you to potentially postpone the tax liability by reinvesting some or all of the proceeds.
It's important to note that most landlords do not have access to rollover relief because it does not apply to Buy-to-Let (BTL) properties.
UK residents are required to report the sale of residential properties in the UK and make payment for Capital Gains Tax within 60 days of the sale's completion if they have a Capital Gains Tax obligation.
Non-UK residents, on the other hand, must report the sale of all properties and make the Capital Gains Tax payment within 60 days of the sale's completion, regardless of whether there is a tax liability.
If you were not a resident, and you possessed a residential or commercial property on either April 5, 2015, or April 5, 2019, you have the option to utilize the property's valuation as of those respective dates as the initial cost when determining your capital gains tax liability.
The annual capital gains tax allowance is set at £12,300 from the 2020/21 tax year through the 2025/26 tax year and applies to all individuals.
Additionally, you will be eligible for Principal Private Residence relief for any duration during which you have used the property as your primary residence, as well as an additional 9-month period before the sale.
Under specific circumstances, it's possible to mitigate or completely avoid capital gains tax. Here's an example:
Let's say Mrs. Jones owns a property in her name. One strategy could involve transferring the property into joint ownership with Mr. Jones, provided that Mr. Jones has not already utilized his capital gains tax exemption for the relevant tax year. It's important to consider the income levels of both partners because one partner's capital gains tax rate might be higher than the other's. However, caution is necessary, especially if this transfer occurs shortly before a sale, as HM Revenue and Customs may challenge the transaction under anti-avoidance rules. Additionally, it's crucial to ensure that any income received after the property transfer is reported on the tax returns of both spouses, which could potentially increase their income tax liability. There will also be associated costs for transferring the property into joint ownership.
Principal Private Residence relief is a tax benefit provided when you sell a property that has, at any point during your ownership, served as your primary place of residence.
Undergoing a divorce can be an emotionally challenging period, making it crucial to obtain expert guidance.
If you're in the midst of a divorce, the window for Capital Gains Tax (CGT) relief between former spouses is prolonged, but this extension only applies until the conclusion of the tax year in which the separation occurred.
Certainly. Corporate taxes are paid by companies. When a company owns and sells property, the resulting profits are subject to a 19% corporate tax rate. As of April 1, 2023, the government has suggested a new tax structure. Under this proposal, the initial £50,000 of profits will be taxed at 19%, the subsequent £200,000 at a rate of 26.5%, and any remaining profits will be subject to a 25% tax rate. In cases where multiple companies are under common control, these profit bands are evenly distributed among the associated companies.
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Whether you're a first-time property owner facing the need to file a tax return or a seasoned entrepreneur looking to streamline your processes, we are here to assist you.