Questions and Answers
Is Capital Gains Tax reducing?
I am getting ready to sell a property that I’m renting out and I know that I may need to pay Capital Gains Tax. I’ve heard that it is going down, is this correct?
By Catherine Heinen, FCCACapital Gains Tax (CGT) is the tax paid on gains made from the disposal of assets. As a rental property owner, you are correct in thinking that you may have a CGT liability. With property valuations in the UK increasing, it’s possible that you will make a gain when selling the property which may be taxable.
The amount of tax you pay will depend on:
- whether the property is residential or not
- the length of time the property was your main residence or let out (if residential)
- whether you have made any other taxable gains in the same tax year
The Annual Exempt Amount (AEA) has been reduced, which means that less of the gain is covered by a tax-free allowance. From 6th April 2024, this reduces to £3,000 for individuals and £1,500 for trustees.
Furthermore, from 6th April 2024, the higher rate for residential disposals has been reduced from 28% to 24%.
CGT rates in the UK, from 6th April 2024 are:
| Residential property | Other chargeable assets | |
| Basic rate taxpayer | 18% | 10% |
| Higher/additional rate taxpayer | 24% | 20% |
You have 60 days from completion to report a taxable gain and CGT liability to HM Revenue and Customs. If you are a non-UK resident landlord, you must report the disposal to HMRC regardless of whether there is a capital gain.
Any individual disposing of an eligible asset is advised to seek professional advice as the CGT legislation can be complex and there are numerous reliefs and exemptions available.
How TaxAssist Accountants can help
Our team at TaxAssist Accountants are experienced in calculating Capital Gains Tax liabilities and reliefs, so speak to one of our advisors today. Call us on 01223 414033 or use our online contact form.
Date published 14 Mar 2024 | Last updated 20 Mar 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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