Capital Gains Valuations
What is Capital Gains Tax?
Capital Gains Tax has to be paid in the UK when you sell a property which has increased in value since you purchased it. This only applies to properties that you do not live in. These properties can range from residential to commercial, such as industrial units.
The tax rate you pay only applies to any increase in value and is not applied to the total sale price of the property. The rate you will pay depends on a number of factors, including your income and the size of the gain you have made.
Since 1982, any gain you make from investment into property is subject to Capital Gains Tax.
In what circumstances would you need a property valuation for capital gains tax purposes?
In some cases, calculating capital gains tax is merely a matter of calculating the gains from the sale of the property compared to the purchasing price. However, when one or both of these figures are unavailable, a capital gains valuation will be necessary to determine the market property value at the corresponding times. This will be the case in a number of contexts, including:
- The property was sold under market value to benefit the buyer.
- The property was acquired before 31st March 1982
- The property is given away or passed onto a family member
- You are selling an inherited property.
- You are selling a gifted property.
Our RICS chartered surveyors carry out accurate evidence valuations that are sure to comply with HMRC standards and avoid unnecessary complications. Get in touch today to learn more about how Winfields Surveyors can help you navigate Capital Gain Tax.
Where do we come in?
A property valuation is required to provide dependable information on the worth of the property. This is particularly useful when an individual or entity is charged much higher or lower tax rates than they should be liable for.
Our Chartered Surveyors & Registered Valuers are experienced in providing a detailed and appropriate report for you to submit to your Accountant or HMRC. We can also negotiate for you if the District Valuers dispute your valuation.
It is essential to consider the property’s condition and status at that inspection date. We can undertake this exercise remotely if you have already sold the property.
An experienced Valuer is essential to reduce tax liability and avoid penalties. Experience, combined with extensive market knowledge derived from the residential side of Winfields, enables us to offer a fully comprehensive tax valuation service.
Frequently Asked Questions
You will need to pay capital gains tax purposes in the following circumstances:
– The property being sold is not your primary residence
– The property is your primary home, but it has been used for business purposes
– The property is very large
– The property has been let out at any point
You may also need a capital gains tax valuation if you have lived in the property for less than two years from purchase. Other circumstances where Capital Gains Tax is levied are where the occupier exercises their right to buy or where there is a transfer of shared ownership, as the market value is established for stamp duty and Non-Domicile assessments.
For capital gains tax purposes, ‘disposing of’ includes selling, trading, and gifting. The purpose of the valuation is to accurately calculate Capital Gains Tax in accordance with Taxation of Chargeable Gains Tax 1992 when a property is disposed of. The increase in property value is subject to tax.
Capital gains tax is based on the value of a property on the date it was acquired. This means that the property market value at that exact time of sale is the basis of how we find the capital gains tax on that property.
In the United Kingdom, capital gains tax is based on your tax bracket. You’ll pay 18% capital gains tax if you are a basic-rate taxpayer. If you are in a higher tax bracket, you will pay 28% on any gains you made from selling a property that qualifies for capital gains tax.