PROPERTY TAX

Will I have to pay any tax when I sell my home?

You shall have no tax to pay on the sale of your home provided it has been your main residence during the entire time you have owned it.

What about if I rent out a room in my home?

You will not have to pay any tax if you let out a room in your house provided the rent you receive is not more than £7,500 per year. Any rent received in excess of this will be taxable.

What about tax on rent I receive on a property that I let out?

If you rent out a property then you will need to prepare Rental Income Statements each year and you will have to pay tax on any profits you make. The profits will be the rents you receive less any allowable expenses.

Allowable expenses include:

  • Repairs and Maintenance Costs
  • Interest on any loan or Mortgage to buy the property
  • Service Charges
  • Agents fees
  • Accountancy Fees
  • Cost of furniture & fittings

What about when I sell a property I have been letting out, will I have any tax to pay?

When you sell a property that you have been renting out, you will have to pay tax on any profit you make on the sale. The profit will be the sale proceeds less the original cost of the property, including agents/legal fees etc, plus the cost of any property enhancements you have made while you owned the property.

There are certain other relief's allowed depending on the circumstances. Typically if the property was your main residence at any time during the period you have owned it then you will be able to claim residence relief in addition to lettings relief. Each person is also entitled to his or her annual capital gains tax exemption, which is currently £11,300. The current rate at which these profits would be taxed is 18% (18% up to the basic rate band and 28% thereafter)

 

All Rights Reserved | © Gerald Charles & Co