CGT and income

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    CGT and income

    Considering selling our rental property and trying to estimate how much CGT is due. We are both basic rate tax payers and the gain from the property will take us into higher rate, so the amount of tax we pay will depend on income for that year – it does vary year to year. I presume the relevant income is for the tax year in which you sell the property (not the previous one), as I cannot find any mention of this.

    Is this correct? So, if the house is sold on 6th April 2023, it is income for 2023-24 that counts?

    But, I believe CGT has to be reported and paid within 2 months, so how will it be worked out in that case? Do we/HMRC (which?) estimate our income, and then correct it at the end of the tax year?

    Thanks in advance for any advice.

    #2
    60 days not 2 months.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Originally posted by slopemaster View Post
      But, I believe CGT has to be reported and paid within 2 months, so how will it be worked out in that case? Do we/HMRC (which?) estimate our income, and then correct it at the end of the tax year?
      You estimate your income for this year and declare and pay the tax accordingly.
      When you complete your tax return for the tax year, the figures are adjusted then.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        if the house is sold on 6th April 2023, it is income for 2023-24 that counts?
        Yes

        Do we/HMRC (which?) estimate our income, and then correct it at the end of the tax year?
        You do, or better an accountant but essentially you report and pay the gain at HMRC https://www.gov.uk/report-and-pay-yo...r-6-april-2020 estimating what you need to, and then report it again essentially in your tax return when all the facts are known. Tax paid earlier is deducted from the final liability.

        Comment


          #5
          Thank you all

          Comment


            #6
            The capital gains Tax form SA108 is submitted after sale of property .

            https://assets.publishing.service.go...sa108-2022.pdf

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