Understanding Capital Gains Tax (CGT)
Selling an Investment Property? Think CGT!
Are you contemplating selling your investment property, or perhaps you’ve recently sold one? Are you aware of Capital Gains Tax (CGT) and the 60-day CGT reporting rule limit and how this may impact you?
Understanding Capital Gains Tax (CGT)
Capital Gains Tax is a tax applied to the profit you make when you sell something that has increased in value. So, if you’ve decided to sell your investment property (or perhaps some other investment!) and it has increased in value, then the CGT may apply to you!
What you need to know
Navigating the complexities of CGT isn’t entirely clear-cut. Some things may actually be tax-free or if the ‘gain’ falls under your tax-free allowance then you might not have to pay at all!
It is really important to report and pay any capital gains on time! The government has implemented various changes to Capital Gains Tax (CGT) reporting rules, emphasizing the importance of individuals and businesses paying their fair share of taxes. One notable change is the introduction of the 60-day CGT reporting rule, which has grabbed the attention and scrutiny from both taxpayers and experts alike.
The 60-Day CGT Reporting Rule
Introduced in April 2020, the 60-day CGT Reporting Rule is a new requirement for taxpayers in the UK. It mandates that individuals and trustees must report and pay any Capital Gains Tax on residential property within 60 days of the completion date of the property sale. It significantly less time than taxpayers had before. This rule applies to both UK and non-UK residents who have made a capital gain on the sale of UK residential property, including rental properties and second homes.
Need some assistance?
So, whether you are a seasoned investor or a first-time seller, taking the time to understand CGT and any rules that may apply will contribute to a smooth property selling experience. If you need any assistance, contact us today, our friendly team at A&M Accounting Services will be happy to help!
