Property Records & TaxCapital Gains Tax Computation

Three things, and only three: what you gave for the property and the incidental costs of acquiring it (TCGA 1992 s38(1)(a)); capital improvements still reflected in the property when you sold it (s38(1)(b)); and the incidental costs of the disposal (s38(1)(c)). The list in s38(2) is exhaustive — surveyors, valuers, auctioneers, accountants, agents, legal advisers, transfer costs and advertising. Anything else is not deductible from the gain.

No. An arrangement fee, a lender’s valuation, mortgage interest, an early repayment charge and a deeds release fee are all costs of borrowing money, not costs of acquiring or disposing of the property. They belong in the rental account, where residential interest for an individual is restricted to a basic-rate tax reduction under ITTOIA 2005 s272A. Deducting them from the gain is one of the commonest errors on a disposal.

It reduces what you gave for the property, so it reduces the base cost. If the price was £150,000 and the builder gifted £22,500, the consideration you gave was £127,500. Crediting the gift to sale proceeds instead reaches the same gain on a straightforward disposal, but leaves the base cost overstated — which matters on a part disposal, an enhancement claim or an enquiry. The lender must also be told about a gifted deposit, and the SDLT consideration is a separate question of fact.

No. Repairs are revenue expenditure, deducted against rental profits in the year you paid them. Only capital improvements count as enhancement expenditure, and only if they are still reflected in the property at the date of disposal — a kitchen fitted in 2010 and ripped out in 2020 is not deductible. If you claimed something as a repair against rental income, you cannot also claim it as base cost.

For a UK residential property disposed of by an individual, 18% to the extent the gain falls within the unused basic rate band and 24% above it. The band is worked out after your other income, so a gain can straddle both rates. A company pays corporation tax on its chargeable gain instead, with no annual exempt amount. Rates change; this page carries a table by tax year and refuses any year it has no table for.

Where a UK resident disposes of UK residential property and capital gains tax is payable, the return and a payment on account are due within 60 days of completion. If no tax is payable — the gain is covered by losses, reliefs or the annual exempt amount — no 60-day return is needed. A non-resident must report a UK property disposal within 60 days whether or not tax is due. The disposal still goes on the self assessment return for the year.

The gain is apportioned over your period of ownership. Months when the property was your only or main residence are exempt, and so are the final 9 months of ownership provided it was your only or main residence at some point. So on 12 years of ownership with 4 years of occupation, 48 months plus the final 9 are exempt out of 144, and the rest of the gain is chargeable. Periods of deemed occupation — working abroad, job-related absence — can add to the exempt months.

Rarely. Since 6 April 2020 it applies only where you shared occupation of the property with your tenant. If you moved out and let the whole property, it does not apply, even though it would have done before that date. Where it does apply it is the lowest of the private residence relief, £40,000, and the gain attributable to the letting.

A loss on a disposal is allowable. It is set against gains of the same tax year first, and any balance is carried forward indefinitely — but only if you report it to HMRC within four years of the end of the tax year in which it arose. Carried-forward losses are used only to bring later gains down to the annual exempt amount, not below it.

Each owner computes their own gain on their share of the consideration and their share of the costs, and each has their own annual exempt amount, their own rate band and their own 60-day obligation. Enter your share in the tool and the gain is apportioned. Spouses and civil partners transferring between themselves do so on a no gain, no loss basis — the transferee takes over the original base cost.

No. A company has no annual exempt amount. It pays corporation tax on its chargeable gains as part of its taxable total profits, it has no 60-day reporting obligation for the gain, and it may claim indexation allowance on costs incurred up to December 2017 — which can reduce a gain to nil but cannot create or increase a loss.

Because the same figures answer two different questions. The statement is what HMRC expects to see. The journal is what your books need: the property cleared out of the balance sheet, the costs of disposal posted, the proceeds in, and the balance on the disposal account taken to capital. Both are produced from one set of entries, so they cannot disagree.

Nothing leaves your browser. There is no account and no server: the computation runs on this page, and the Excel and PDF files are built on your device. “Remember on this device” is off unless you switch it on, and stores the figures in your own browser only — you can delete that copy at any time.