Capital Gains on Residential & Let Property

Capital Gains on Residential Let Property

Whether you are selling your private residential property or rental property there may be Capital Gains Tax on the profit on the disposal.

The Gains (the net increase value of the property from the time you purchased and when you sell it) is subject to Capital Gains Tax.  Given the high values relating to residential properties, the tax bill could be significant and it is vital that you seek specialist tax advice from a residential property tax advisor.

Fusion Accountants, have a dedicated inhouse specialist in providing tax advice to help plan and minimise these taxes.

There are number of reliefs available to reduce your Capital Gains Tax.

Principal Private Resident Relief

Gains made on your only or main residence (dwelling house) will qualify for Principal Private Residence Relief (PPR). 

A “dwelling house” means not only the main building, but iincludes any relevant buildings adjoining it. Relevant buildings here would include garages, outhouses, and separate building occupied either by members of the family, staff or employees.

A tax payers Principle Private Residence also includes gardens and grounds (provided ithe entire area including the site of the house does not exceed half a hectare).

HMRC will permit a larger area to qualify for PPR relief if they are satisfied that the whole area of land is required for the reasonable enjoyment of the property.

Letting Relief

Letting relief is available where a dwelling house has been let as residential accommodation during a period of absence. Lettings relief
is only available during periods when the property is either actually occupied or deemed to be occupied by the owner.

Letting relief is the lowest of the following three:

  • 1. Lettings relief can never exceed the amount of the PPR relief
  • 2. Letting relief cannot be more than the gain arising during the period of absence in which the property was let out
  • 3. Maximum of £40,000

Other Reliefs

Other reliefs may be available such as Working overseas, Gift Relief, Roll Over Relief etc.

How we can help?

Fusion Accountants specialists will discuss these with you and help identify the options available to you to minimise you Capital Gains Tax liability for your residential property.

What you can expect:

  • Dedicated Accountants to help with assessment and planning
  • Monthly / Yearly Accounts
  • Tax Planning and Advice
  • Personal Tax Returns

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