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Contact us for tax advice and services for landlords based in the UK where you are thinking of disposing of flats or houses which you are currently renting out. If you have sold a residential property and there is capital gains tax to pay, you need to make a report and pay the tax to HMRC within 60 days (30 days prior to 27th October 2021) of completion of the sale.
If you live overseas, own any property in the UK and are considering selling it, talk to us about how to avoid potential tax pitfalls. You need to make a report and pay the tax to HMRC within 60 days (30 days prior to 27th October 2021) of completion of the sale for any type of property sale.
Frequently asked questions
Can I claim Capital Gains Tax Rollover Relief?
Rollover Relief is available on furnished holiday lettings and on certain trading assets. If you reinvest all or some of your proceeds, you may be able to defer the gain by claiming rollover relief.
Rollover relief however is not available to most landlords as BTL property is not included under the relief.
How do I report and pay CGT?
For UK residents, the disposal of UK residential properties must be reported and the payment of Capital Gains Tax must be made within 60 days of the completion of the sale where there is a Capital Gains Tax liability.
For non-UK residents, the disposal of all properties must be reported and the payment of Capital Gains Tax must be made within 60 days of the completion of the sale whether or not there is tax to pay.
For detailed guidance on the new rules please read our article on reporting and paying capital gains tax on UK property.
I am non-resident how much CGT do I pay?
As a non-resident, if you owned the residential/commercial property at 5th April 2015/5th April 2019 then you can use the value as at 5th April 2015/5th April 2019 as the base cost when calculating CGT. To work out your capital gains tax.
Please see the article on capital gains tax as a uk non resident for more detailed guidance.
What Capital Gains Tax relief or allowances do I get when I sell my property?
There is an annual capital gains tax allowance of £12,300 for 2020/21 to 2025/26 for everyone.
You will also get Principle Private Residence relief for any period of time that you have lived at the property as your main residence plus the final 9 months.
How can I avoid Capital Gains Tax on rental property?
In certain circumstances you may be able to reduce or avoid entirely any capital gains tax. For example:
Mrs Jones owns a property in her own name. It may be an idea to transfer the property into joint names with Mr Jones before a sale assuming that Mr Jones has not already used his CGT exemption in the tax year concerned. You do have to take into account the levels of income of each partner because the rate of capital gains tax for one partner may be higher than that of the other partner. Care does need to be taken as if this is carried out shortly before a sale, then HM Revenue and Customs may attack the transaction as invalid under anti-avoidance rules. You also need to ensure that any income received in the period after transfer of the property is declared on each spouse’s tax return which may increase the income tax paid. There would also be the costs of conveying the property into joint names.
What is Principal Private Residence Relief?
Principal Private Residence relief is a tax relief given on the sale of a property which has at any time during your ownership been occupied as your main residence.
Please read our guide to ppr relief for more information.
I am divorcing. Where do I stand with Capital Gains Tax on transfers of property to my ex-partner?
Going through a divorce can be a stressful time so it is vital that you seek professional advice.
If you are in the process of divorce, the period of CGT relief between spouses is extended but only until the end of the tax year of separation. For more detailed information on this please see the following post all about capital gains tax and divorce.
Do limited companies pay Capital Gains Tax?
No. Companies pay corporation tax. If you hold property in a company and make a sale, the profit is subject to corporation tax at 19%. From 1st April 2023, the Government has proposed that the first £50,000 will be taxed at 19%, the next £200,000 will be taxed at 26.5% and the remaining profits will be taxed at 25%. Where companies are under common control the bands are shared equally between each of the associated companies.
Take the next step
Whether acquiring property means you find yourself having to submit a tax return for the first time or you’re an experienced business person who wants to save valuable time, we can help.