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Chartered AccountantsChartered Accountants

Rental Property - Capital Gains Tax

In simple terms, on disposal of a buy to let property, Capital Gains Tax (CGT) is potentially payable on the proceeds on disposal of the property less its original purchase price.  After deducting an Individuals CGT Annual Exemption, currently £10,600, the remaining balance will be taxed at 18% or 28% or a combination of these rates dependent on the total Taxable Income and Gains of the individual.

For income and gains up to £35,000 the rate of 18% applies, for income and gains over £35,000 the rate is 28%.

It is quite common for Rental properties to have been an individual’s main home or ‘Principle Private Residence’ (PPR).  Where this is the case, the period during which the property was their only or main home will be exempt for tax as will the final three years of ownership, regardless of whether the property was let during this final period.   In addition a further relief ‘Private letting relief’ will be available on a property which has been your PPR.  The relief available is the lower of:
1. The gain exempted under PPR relief
2. The gain arising as a consequence of letting
3. £40,000

For the rules on the Capital Gains tax reliefs available on Furnished Holiday Lets see that section of the website.

Testimonials

  • "After many years working in an independent opticians, Victoria and I thought it was time to venture out and consider opening our own opticians practice.
    We had never previously run our own business, and wanted to look for some professional and impartial advice. After speaking with other opticians, we were advised to speak with Desirie from Morris & Co.
    What can we say! From our first tentative telephone call to Desirie, to find out how we might set up a new business, all the way through to purchasing our practice, and finally opening the doors to customers, Desirie has been an inspiration. She gave us excellent advice on how to negotiate at each stage of our purchase, helped us to draw up a realistic business strategy and always kept our feet firmly on the floor.
    Since we began trading in December 2012, we have had frequent contact with Desirie and the team. We would not hesitate to recommend Desirie and Morris & Co as your future accountants, they have given us a great start to our new business, and are always keen to make sure we stay on the right pathway to success”
    Keith and Victoria Williams run Taylors Opticians in Frodsham
  • "Over a number of years Morris & Co have provided me with sound financial and business advice. Their in depth knowledge of my particular sector has proved invaluable and they explain my accounts in a way that is easy to understand. All my questions are answered promptly and efficiently and I really appreciate their level of expertise."
    David Evans, R T Booth & Co Ltd
  • "In addition to providing management and year end accounts, Morris & Co have assisted me with and prepared business plans and cash flow forecasts... to help me make vital business decisions."
    Dave Lawson, Cardiff
  • "We have found them efficient and user friendly, and have made a big saving in our accountancy and bookkeeping costs. I can unreservedly recommend the arrangement to my fellow franchisees."
    Colin Donald, Slough
  • "I am delighted with the service I have received from Morris & Co. As BFA Affiliate's I have confidence in their level of knowledge and expertise. As a result I am free to concentrate on building my business with their help and advice."
    Simon Wise, Driver Hire London North
  • "At first I was somewhat reluctant... I have been able to establish a mutual trust and experienced a professional and thorough service."
    Kevin Morrissey, Sheffield
  • "When appointing an accountant it was very important to me to select someone who was not only knowledgeable but friendly and approachable. I have always received proactive, professional advice and I know that the specialist advice I require to run my business is only ever a phone call away. A VAT full cost and apportionment calculation was recently undertaken for my company. As a result of this, my percentages have reduced, thereby saving me additional money."
    Ian McGarvey