How to work out your capital gains tax
UK Property Tax Specialists
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Tax return forms are available free of charge from HMRC. We are independent accountants and not part of or affiliated to HMRC. We remove the stress and anxiety of preparing your tax return by completing and filing your tax return for you. We shall help you to pay the least amount of tax by advising you about the expenses which you are entitled to claim.
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01902 711370
0800 907 8633 is the trading name of Thandi Nicholls Ltd Accountants Registered Office Creative Industries Centre Glaisher Drive Wolverhampton WV10 9TG Registered in England Company Number 7319439 Directors K W Nicholls FCA S S Thandi BA
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In 2008, the calculation of Capital Gains was simplified as follows:

*If the asset was purchased before 31st March 1982 then cost is substituted with the market value on this date plus any enhancement expenditure after this date.

Enhancement expenditure does not include any items of maintenance or finance costs. If you carry out work on a property and then sell it immediately, this may be treated as trading income rather than a capital gain.

It is important to understand that the date of disposal for Capital Gains tax purposes is the date contracts are exchanged (or the date that the contract becomes unconditional). It is not the date when you receive the monies (the completion date) unless exchange of contracts and completion occur on the same day.

Some reliefs are discussed in other articles. After deducting the reliefs there is an annual exemption which is deducted from the net gains after losses in the year.The annual exemption is £11,100 for 2015/16 and 2016/17 and £11,300 for 2017/18 for each individual.

Apart from residential properties, tax on gains is then charged at 10% on any surplus basic rate band available for income tax purposes and 20% on the remainder. For residential properties gains are charged at 18% on any surplus basic rate band for income tax purposes and 28% on the remainder. If there is an entitlement to Entrepreneurís Relief the gain is taxed at 10%.

If you are not resident in the United Kingdom then there is normally no Capital Gains Tax apart from on the disposal of dwellings after 5th April 2015 or assets used in a UK trade. You may have a liability if you dispose of an asset and you were to return to the UK within five years of leaving. 

© Thandi Nicholls Ltd 2017 All Rights Reserved - The above article is provided for guidance only and may not cover your personal circumstances so you should not rely on it. It is important that you seek  appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. Thandi Nicholls Ltd t/a,  K Nicholls FCA or S Thandi cannot be held responsible for the consequences of any action or the consequences of deciding not to act.
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Proceeds of Sale less any selling costs       X
Cost of asset including purchase plus any enhancement expenditure *       Y

Capital Gain

X - Y