You may need to pay tax when you sell your home if you do not qualify for full Private Residence Relief.
If you have tax to pay you need to work out how much gain you made when you sold your home.
Your gain is usually the difference between what you paid for your home and what you sold it for. Use the market value instead if:
- it was a gift (there are different rules if it was to your spouse, civil partner or a charity)
- you sold it for less than it was worth to help the buyer
- you inherited the asset (and do not know the Inheritance Tax value)
- you owned it before April 1982
If you’re not resident in the UK for tax, you only pay tax on gains since 5 April 2015.
Deducting costs
You can deduct costs of buying, selling or improving your property from your gain. These include:
- estate agents’ and solicitors’ fees
- costs of improvement works, for example for an extension - normal maintenance costs like decorating do not count
You cannot deduct certain costs, like interest on a loan to buy your property. Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.
There are special rules for calculating your gain if you sell a lease or your home is compulsorily purchased.
Work out if you need to pay Capital Gains Tax
Once you know your gain and have worked out how much tax relief you get, you can calculate if you need to report and pay Capital Gains Tax.
You cannot use the calculator if you:
- sold other chargeable assets in the tax year, for example shares
- reduced your share of a property that you still jointly own
- claim any reliefs other than Private Residence Relief or Letting Relief
- are a company, agent, trustee or personal representative
If you have Capital Gains Tax to pay
You must report and pay any Capital Gains Tax on most sales of UK property within 60 days.
