You may have to pay capital gains tax on a property that isn’t your principal private residence (PPR)
- buy-to-let properties
- business premises
- inherited property
- sell your home (PPR)
- live abroad
- are a company registered abroad
What tax reliefs are available?
You may be able to reduce the amount of capital gains tax you’re required to pay. Here’s a walk through of some of those reliefs:
Private residence relief
- If you’ve lived in your second home at any point you may be eligible for Private Residence Relief. This must have been for a reasonable amount of time (not just 1 week, for example).
- You can get relief if you’re living away from home for any reason for periods adding up to 3 years (up to 4 years if you have to live away from home for work).
If you lived in your home at the same time as your tenants, you may qualify for Letting Relief on the gains you make when you sell the property.
- The amount of years you lived in your home
- The final 9 months you owned your home (even if you were not living there at the time)
Everyone gets a Capital Gains Allowance
If you co-own the property with another person, you’ll both get a capital gains allowance, meaning you can effectively double the amount you gain before CGT is due.
This can feel complicated, get support with your own situation
Don’t worry if you’re reading through this and it still isn’t crystal clear – there’s a reason we do the job we do! When it comes to paying tax and maximising your reliefs, it can be helpful to talk to us about your unique set of circumstances. We can help you navigate the world of CGT and make sure you’re clear on your position.