There’s not really anything worse than paying more tax than you need to. When selling a property that is not your main residence, you’ll find that capital gains tax can be a real burden. But there is loads of stuff you can do to get around that.
Ultimately, you want to pay as little tax as you can, especially on something like a second home. It’s worth knowing about the changes that could affect you.
That’s why we’ve written this blog. We’ve got ya’.
So what are the changes?
Basically, you now have 60 days to calculate and pay capital gains tax to HMRC arising on the disposal of additional residential properties after you’ve sold them.
Until as recently as October 2021, it used to be that you had just 30 days to pay any gain after completing the sale of residential property that’s not your main residence.
But that changed in the Chancellor’s most recent Budget last autumn, giving slightly more time for you to either supply correct figures or engage with us as your accountant.
If you don’t meet this new 60-day deadline, there will be penalties to pay which we really wouldn’t recommend getting into the habit of racking up.
How does this affect me?
Well, it’s not all bad news – capital gains tax usually doesn’t apply to the sale of a family home due to private residential relief.
Most sales fall into this category, but if they’ve been held as a buy-to-let or perhaps you became an accidental landlord after shacking up with your missus, then these new rules will apply.
These rules mean you’ll need to report and pay any tax owed within 60 days using capital gains on UK property account. Of course, it’s no sweat if no tax is due, the 60-day rule simply won’t apply.
The final amount that’s owed will be calculated as part of a normal self-assessment tax return for the tax year in which you sold the property.
How can we help?
And breathe…
If you need accounting support, that’s why we’re here. Selling additional residential property is confusing and can be difficult to really get your head around, so our phones are always ready for you to call or message.
Let us know as soon as possible. It’s not worth risking the penalties, so the sooner you know you’re going to be selling, the better. We can make sure everything is done in good time. Then everyone will be happy.
Get in touch with us today and we’ll give you a hand avoiding capital gains tax.