CGT and income

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    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

            Comment

            Latest Activity

            Collapse

            • Capital Gains Tax
              by LVA
              Apologies if this has been covered in this website but I've looked and cannot find...

              I bought my flat in 1997, rented it out in 2001 (ish), returned to live in it in March 2020. Its approx 27 years ownership and 7 ish years living in it.

              My accountant tells me the CGT...
              16-08-2022, 12:59 PM
            • Reply to Capital Gains Tax
              by gnvqsos
              AndrewDod,

              Inflation can be corrosive but it is not a tax ,as the government do not receive a corresponding income. The government spend money derived from either tax receipts ,trading income or by borrowing through the sale of securities/bonds. Printed money is distributed by commercial...
              18-08-2022, 18:59 PM
            • Reply to Capital Gains Tax
              by Gordon999
              The capital gains is charged at 18% or 28 % rate, and this depends on your job income, which is taxed at 20% or 40% .

              Assuming the capital gains tax rate is about 25% average , your total gain is probably around 4 x £50K = £200K ( or over. )

              If you are married...
              18-08-2022, 11:26 AM
            • Overseas
              by jase222
              Hi,
              I will be moving to Spain for between 6-9months and I will obviously be paying my taxes and I spoke to a Spainish tax accountant who said the authorities won’t be interested in anybody who stays for less than a year as long as you can prove you pay tax in your own country? I’ve never heard...
              17-08-2022, 08:05 AM
            • Reply to Overseas
              by jpkeates
              I suspect that the accountant wasn't citing the regulations, he was explaining the reality....
              18-08-2022, 11:18 AM
            • Reply to Giving/Gifting House to Kids
              by Tony-Edwards
              It wasn't meant to question HMRC - it was a response to the rude and thoughtless comments made by some....
              18-08-2022, 09:51 AM
            • Giving/Gifting House to Kids
              by Tony-Edwards
              Elderly parents in early 80s, one in not so good health.

              Lived in the same home (no mortgage etc) for 50+ years - now worth approx £180,000 - £200,000 and they have minimal savings.

              Looking ahead, if one has to go into care (or council provided home care) I understand there...
              11-08-2022, 11:12 AM
            • Reply to Giving/Gifting House to Kids
              by Tony-Edwards
              gnvqsos,

              Seriously? - the investment was to provide several annual holidays. We're talking 50 years ago, not last week.

              Unfortunately, no they didn't have a spare £1,000 lying around for unforeseen circumstances
              18-08-2022, 09:07 AM
            • Reply to Capital Gains Tax
              by AndrewDod
              I think the point that is being missed here is that inflation *is itself* a type of tax.

              It is a tax on savings (on people who try to save so they they or their disabled child can cope without having to lean on the state instead of smoking it away).

              Put simply, government...
              17-08-2022, 20:20 PM
            • Reply to Capital Gains Tax
              by gnvqsos
              I believe CGT did adjust gains in line with the RPI and also had taper relief. This was rejected in the late 90s by GB.
              17-08-2022, 18:33 PM
            Working...
            X