Capital Gains Tax Planning
Capital Gains Tax (CGT) affects the profit you make when selling or gifting UK property, and the bill can be painful: gains on residential assets are charged at 18% if you remain a basic-rate taxpayer and 24% once you tip into the higher or additional bands, and HMRC now wants its money within 60 days of completion. The first line of defence is Private Residence Relief, which removes CGT on a property that has been your main home throughout ownership, including certain “deemed occupation” periods many owners overlook. Even after you move out, the final 9 months of ownership stay exempt, and up to £40,000 of Lettings Relief may be available if you once rented part of your home.
Next comes timing. Every individual enjoys a £3,000 annual CGT exemption (2023/24), so staggering disposals across tax years or between joint owners, can shelter a larger slice of the gain. Selling just after 5 April often defers tax for almost 22 months, while completing a sale before the year-end can absorb any unused allowance. We calculate the optimal window around your income position, other disposals and the property market, so you pay the lowest legal amount.
Your “gain” is also lower than you might think once legitimate costs are factored in. We add value-enhancing improvements, extensions, new kitchens, loft conversions, plus purchase and sale expenses such as stamp duty, estate-agent fees and solicitors’ bills, all of which lift the cost base and trim the taxable profit. Good record-keeping turns every invoice into a deduction; our templates make sure nothing is missed and everything would satisfy HMRC on review.
For larger or business-related gains we look beyond reliefs to outright deferral. Roll-over relief lets you reinvest proceeds into new trading assets without immediate CGT, while EIS or SEIS shares can push the charge years into the future and potentially yield income-tax breaks. Transferring property into a company may qualify for Incorporation Relief, and gifting business assets or farmland often triggers Hold-over Relief, moving the tax to the recipient instead of writing a cheque today. In short, with considered planning CGT becomes a manageable cost, not a nasty post-sale surprise.
