Moving on up
The UK property market has continued to be buoyant over recent months, encouraged by the Stamp Duty holiday and a demand for housing outside of large cities, as people have discovered that working from home is a viable option.
Figures from the estate agent Keller Williams UK, which analysed Land Registry data, show house prices are rapidly rising across the country and are not showing any signs of slowing down. In Kent, the biggest rise in house prices in the last year was recorded in Tonbridge and Malling. Between May 2020 and May 2021, the average house price in the area shot up by £43,614. In Tunbridge Wells, during the same period, the change was £32,049.
Here at Lewis & Co we have a number of landlords as clients and this rise in house prices is leading to quite a few of them looking to cash in on their investments. One client told us that a recent valuation had ‘blown his mind’.
Of course, selling a property and enjoying the profits achieved is never that simple, as there will be tax implications – including, potentially, Capital Gains Tax (CGT), to consider. CGT is a tax on the profit when you sell an asset that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive, but with house prices increasing as much as they are currently, it’s something which certainly needs consideration.
Here at Lewis & Co, we can advise clients on the tax implications of both buying and selling property when it’s part of a business transaction.
It’s worth remembering that, as of 6 April 2020, CGT now needs to be reported and paid within 30 days of completion. That said, you may only have to pay CGT if you make a profit when you sell property that’s not your main residence, which typically includes buy-to-let properties, land or inherited property. In most cases, you do not need to pay the tax when you sell your main home.
This new rule has come in under the Finance Act 2019 and states that, where CGT is due on the disposal of UK residential property by a UK resident individual or trustees, a new standalone online return will need to be filed, together with payment on account of CGT, within 30 days of the date of completion of the transaction.
If you’ve got any questions or need any help, please call our team on: 01892 513515 or email: info@lewisandco.biz