Do I need to pay capital gains tax on my UK home?
Property you sell in the UK may incur capital tax gains on profits made. However, if the property you’re selling is your main home, this is exempt from CGT due toprivate residence relief. However, any other property or a second home that you sell is subject to capital gains tax.
What qualifies as a main residence for CGT purposes?
For the purposes of CGT, a property is classed as your main residenceifallof the following apply:
- You have one home and you’ve lived in it as your main home for all the time you’ve owned it
- You have not let part of it out (not including having a lodger)
- You have not used a part of your home exclusively for business purposes
- The grounds, including all buildings, occupy less than 5,000 square metres
- You did not buy it just to make a gain
If all of these points apply, you will automatically qualify for private residence relief. This means you will not have to pay CGT when you sell the property. However, if one or more of them applies, you may have to pay some tax. You can find out if you’re eligible forprivate residence relief here.
