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Capital Gains Tax on UK Residential Property | Report and pay capital gains tax on uk property

Capital Gains Tax on UK Residential Property | Report and pay capital gains tax on uk property

Mike Wakeford

A higher rate of Capital Gains Tax (CGT) applies to gains on the disposal of residential property if the gain falls into the higher rate band. In the Spring Budget, the Chancellor announced a reduction in the higher rate of capital gains tax that exists for residential property from the current rate of 28% to 24% from 6 April 2024. These rates apply to higher rate taxpayers as well as to trustees and personal representatives. The lower rate that applies to basic rate taxpayers will remain unchanged at 18%.

It is expected that the 4% reduction in the 28% rate of capital gains tax on residential properties will help increase revenue for the Treasury as the new rate is expected to increase the number of transactions.

Most people are aware that they may not have to pay CGT when they sell their qualifying residential property used wholly as a main family residence. However other sales of property that are not a principle private residence, will be subject to CGT.

This includes:

  • buy-to-let properties

  • business premises

  • land

  • inherited property

There are various reliefs available from CGT for the sale of qualifying business assets.

The 18% and 28% rates of CGT that apply to gains in respect of carried interest remain unchanged from 6 April 2024. These rates previously mirrored those for CGT on disposals of residential property.

Contact us
If you are in the process on selling a residential property and are unsure on what the Capital gains tax impact of this sale will be or if your residential property is subject to CGT, contact the Moore (South) tax team today. Our team can help you understand your capital gains tax requirements.