Capital Gains Tax is a tax on the profit when you sell (or dispose of) an asset which has increased in value, the most common of these obviously being property or land. Please note that its only the gain that you pay tax on, not the amount you have received for the sale. You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance which is £12,000 – commonly known as the Annual Exempt Amount.
PRIVATE RESIDENCE RELIEF
You do not need to pay Capital Gains Tax when you sell your home if all of the following apply:-
• You have one home and you’ve lived in it as your main home for all the time you’ve owned it
• You have not let part of it out – this does not include having a single lodger
• You have not used the property for business only
• The grounds, including all buildings, are less than 5,000 square metres in total
• You did not buy it just with the intention to sell for a profit
If you believe you have any possible issues with CGT it would be advisable to discuss this with an accountant.
