Tax when you sell a property

Tax when you sell a property
Posted

The “Work Out Your Capital Gains Tax” tool on the UK government website is designed to help individuals calculate the capital gains tax (CGT) they might owe when selling a property. This tool is particularly useful for those selling a second home, rental property, or any property that is not their main residence, as these transactions often incur CGT.

What Does This Tool Do?

This tool assists users in calculating the gain realised from selling a property and determining the amount of tax payable. It takes into account various factors, such as the purchase price, selling price, allowable expenses (like legal fees and estate agent fees), and any applicable reliefs (such as Private Residence Relief or Letting Relief). By entering these details, the tool estimates the capital gain and the corresponding tax liability.

How Can You Use This Tool?

Why Is This Important?

Accurate calculation of capital gains tax is crucial to avoid underpayment or overpayment, both of which can lead to financial problems or penalties. The “Work Out Your Capital Gains Tax” tool simplifies this complex process, ensuring you are fully aware of your tax obligations when selling a property. This helps you manage your finances effectively, comply with tax laws, and avoid unexpected tax bills.