RICS Registered

Capital Gains Tax Valuations London

Thomas Winfield
Mr Thomas Winfield DipSP AssocRICS

London Capital Gains Tax Valuation Specialist

Capital Gains Tax Valuation Reports

Selling your property in London can earn you a substantial profit, but it’s important to remember that you may be responsible for paying taxes on the gains from the sale. Your accountant can simplify the process of accurately calculating your tax obligations, but they will need a current market valuation of your home from a RICS Registered Valuer.

 

Here are some reasons why you should choose Winfields:

Understanding Capital Gains Tax

If you’re looking to sell or transfer a property, it’s essential to understand the Capital Gains Tax (CGT) implications. To accurately calculate the CGT payable, you need a professional and reliable valuation report.

Our London-based company specialises in providing accurate and detailed CGT valuation reports. Our team of expert valuers has extensive experience in valuing all types of properties, from residential to commercial and industrial.

capital gains tax valuations london

When is a Property Valuation Required for CGT?

In the realm of property investments and taxation, understanding when and why a property valuation is necessary for capital gains tax (CGT) purposes is crucial. This guide provides a detailed overview of various scenarios where property valuations become essential for accurate CGT calculations.

A property valuation for CGT is not always straightforward and may be needed in several distinct situations:

Below Market Value Sales:

When a property is sold for less than its market value, typically to favour the buyer, a valuation is required to determine the true market worth at the time of sale.

Pre-1982 Acquisitions:

Properties acquired or inherited before March 31, 1982, necessitate a valuation to establish their market value at that historical date.

Property Transfers within the Family:

Valuations are crucial when a property is given away or passed on to a family member to accurately assess its market value at the time of transfer.

Inherited Property Sales:

Selling a property that you’ve inherited requires a valuation to determine its market value at the time of the original owner’s death.

Disposing of Gifted Properties:

When selling a property received as a gift, a valuation is needed to ascertain its value at the time of gifting.

Who is Obligated to Pay Capital Gains Tax?

 

Capital gains tax comes into play under several conditions, including but not limited to:

Non-primary Residences:

CGT is applicable when disposing of a property that isn’t your main home.

Business Use of Main Residence:

If your primary residence has been used for business purposes, CGT may be levied.

Large Properties:

Properties exceeding a certain size threshold may attract CGT upon disposal.

Rental Properties:

CGT is applicable for properties that have been rented out at any point.

Short-term Ownership:

Properties owned for less than two years before disposal may require a CGT valuation.

Other specific scenarios include exercising the right to buy, transfers of shared ownership, and situations relevant for stamp duty and Non-Domicile assessments.

Understanding ‘Disposal’ and CGT Calculations

For CGT purposes, ‘disposing of’ a property includes selling, trading, or gifting. The objective of the valuation is to accurately calculate the CGT based on the increase in property value since acquisition, as outlined in the Taxation of Chargeable Gains Act 1992.

In summary, property valuations play a pivotal role in determining CGT liabilities in various scenarios. Accurate valuations ensure compliance with tax laws and assist in making informed financial decisions. Whether you are selling, gifting, or transferring property, understanding these valuation requirements is key to managing your tax obligations effectively.

Capital Gains Tax Valuation in London

Easy-To-Understand Reports

Our reports are thorough and easy to understand, providing you with all the information you need to make informed decisions. We pride ourselves on our fast turnaround times, ensuring that you receive your report as soon as possible.

Choosing us for your CGT valuation report means you can rest assured that your report is of the highest quality and meets all the necessary standards. We are committed to providing excellent service and helping our clients to make informed decisions when it comes to their property investments.

Let Us Help You

Don’t take any chances with your CGT valuation report. Choose our London-based company for a professional, reliable, and accurate valuation report that you can trust. Contact us today to find out more about our services and how we can help you.

FAQ

Frequently Asked Questions

Capital gains tax on property in the UK is a tax on the profit you make when you sell or dispose of a property that has increased in value. The tax applies to all property types, including residential, buy-to-let, and commercial properties.

The amount of capital gains tax you will pay on the sale of a property depends on several factors, including the sale price of the property, the purchase price of the property, and any allowable expenses that can be deducted from the sale price to reduce the taxable gain.
If you are selling a residential property in the UK, you may be eligible for a special exemption called Private Residence Relief. This exemption can help reduce or eliminate the capital gains tax you must pay. However, specific criteria must be met to qualify for this relief, including that the property must have been your primary residence for the entire period of ownership.

For other properties, the capital gains tax you will pay on the sale will depend on your overall income tax rate. If you are a basic rate taxpayer, you will pay 18% on your gains, while higher rate taxpayers will pay 28%.

It’s essential to keep accurate records of all costs associated with the purchase, maintenance, and sale of your property to ensure you only pay the amount of tax you owe. Consulting a tax professional can also help you navigate the complexities of capital gains tax on property in the UK.

UK residents are chargeable to CGT on disposal of any and all of their assets, regardless of where they are in the world.

Non-residents do not pay UK CGT with the exception of gains arising on property and land situated within the UK.

A gain arises when there is a disposal of a capital asset for a profit. The gain is measured as the difference between the sale proceeds and the acquisition price of an asset.

Allowance is given for certain costs of purchasing or selling the asset and for expenditure incurred on improving the asset during your ownership of it.

The concept of disposal comprises sales, gifts, loss, or destruction of assets.

The principal assets falling out of CGT scope are betting, decorations for valour (i.e. medals), EIS/SEIS shares (see below), Gilts and qualifying corporate bonds, VCT shares (first £200,000) and some wasting chattels.

Gains that fall within the annual exempt amount are tax-free. Also, there is no CGT on gifts between spouses and civil partners.

The legislation rendered several types of reliefs, these are:

Deferral reliefs

Deferral reliefs allow the capital gain on an asset to be deferred to a later time. These are also known as ‘holder’ reliefs and the two main ones are the Enterprise Investment Scheme (EIS) and Gift holdover relief.

Relief on investments

Various investments are exempt from CGT if certain conditions are met; these are:

  • Gains on ISAs are always free of tax.
  • Shares in EIS/SEIS if held for a minimum period of three years.
  • Shares in Venture Capital Trust (VCT) are free of CGT provided full income tax relief was given on the share purchase.
  • Gilts & Qualifying Corporate Bonds if held by individuals.

Relief for disposal of residential property

Principal Private Residence Relief is available to taxpayers disposing of their only or primary residence. PPR relief may exempt all or part of the gain arising.

There’s no relief from CGT for buy-to-let or second homes. A measure of relief (Lettings Relief) is available to landlords who let out part of their principal residence and shares occupancy with a tenant.

Relief for business owners and business assets

There are three very valuable reliefs available to business owners selling some or all of their business or business assets used in the trade.

These are available when disposing of a business in which you are a main owner or investor, or where you re-invest proceeds in another business asset.

Relief for gifts to charities

There’s no CGT payable where assets are gifted to a charity. These gifts are on a no loss/no gain basis, similar to a transfer between spouses.