15:01 PM, 27th October 2010, About 13 years ago
Capital Gains Tax (CGT) is not an opt-in process – if you have made a gain and do not already have a self-assessment tax return, the obligation is on you to report the matter to your tax office and not hope you have got away with it just because you have not had a bill.
For property tax purposes, disposing of land, residential or commercial investment properties and furnished holiday lets come under CGT rules.
Some investors come unstuck as to whether tax is due on ‘disposing’ of property, and the general meaning covers:
It’s the gain you make – not the amount of money you receive for the property – that’s taxed under CGT rules.
Before you do anything else, you need to work out if you have CGT to pay.
If you do, the way you tell HM Revenue and Customs differs depending on whether or not you already complete a self-assessment tax return:
You may have to pay a penalty if you don’t tell HMRC in time, plus interest on any tax due.
You must give HMRC as much information as possible about any gains or losses made and the tax due.
Other key points to remember about CGT are:
The best time to look at tax planning for Capital Gains Tax is before committing to sell a property.
Leaving tax planning decisions until after the sale means the transaction is ‘locked’ and you could end up paying more CGT than is necessary.
If you would like further advice on tax or accountancy please call The Money Centre’s Customer Care Team on 01603 894525 and we will be delighted to refer you to our Joint Venture Tax Partners who specialise in property taxation. The initial introduction is a no cost no obligation service.
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