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Capital gains tax

Capital Gains tax is an unavoidable reality unfortunately, it is charged on the accumulated value of an asset. If you decide to sell a property then you will be charged for any increase in the value that has occurred. Under the current rules you don’t pay capital gains tax when you sell your home, however you do pay when you sell a property that isn’t your home. Basically as a landlord if you sell your home you won’t pay capital gains tax, but if you sell a property that you rent out you will.

For example if you sell a rental property for £250,000 and you bought for £200,000, you would owe capital gains tax on the £50,000 you made. The government give an £11,000 tax free allowance to everybody and if you pay basic income tax rate you will have to pay 18% of the total in tax and 28% in the higher income tax.

For more information and advice click the links below;

gov.uk/capital-gains-tax/overview

gov.uk/personal-tax/capital-gains-tax

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