Property Valuations for CGT Purposes & Capital Gains Tax Valuation
If you sell your London property, you’ll need to pay capital gains tax, which is usually based on the profit from the sale. However, in some situations, you’ll need a professional market valuation from a qualified RICS registered valuer in London.
At Harding Chartered Surveyors, we remove the stress from calculating and paying capital gains tax by providing accurate and timely valuations. Whether you’re selling an inherited property or want to calculate your tax obligations on a buy-to-let home, we can help you.
How does capital gains tax affect London residents?
You need to pay capital gains tax when you sell or ‘dispose of’ an asset that’s increased in value. Your tax obligations are calculated on your gains rather than the selling price. If you bought a house in London for £200,000 and later sold it for £500,000, you’d pay tax on the gain of £300,000.
Regarding capital gains tax, disposing of an asset can mean:
- Selling it
- Trading it for another asset
- Gifting if to somebody else
- Gaining compensation, such as an insurance payout
The amount you pay depends on your taxable income, the gain and any entitled income tax reliefs. If you’re a higher rate taxpayer, capital gains tax is equal to 28% on gains from residential properties and 20% on gains from other assets.
You may still need to pay capital gains tax on assets which sold at a loss if your total taxable gains for the year exceed the tax-free allowance. Contact our RICS registered valuers for more information.
When Do I Need a Market Valuation to Calculate Capital Gains Tax?
Usually, capital gains tax is based on the difference between what you paid for an asset and how much you sold it for, but you need to submit a market valuation to HMRC or the district valuer if any of the following situations apply:
- Gifts
Capital gains tax is based on the value’s property on the date it was gifted. - Assets sold for less than their value to benefit the buyer
Capital gains tax is based on the property’s market value at the time of the sale. - Inherited assets
Capital gains tax is based on the property’s market value at the time of the benefactor’s passing. - Assets purchased before April 1982
Capital gains tax is based on the property’s value on the 31st of March 1982.
Why obtaining a capital gains tax valuation for a London property is beneficial
By obtaining a capital gains tax valuation from a RICS registered valuer, you can:
- Gauge Your Property’s Accurate Value
Let our RICS registered valuers give you an independent and impartial house valuation. - Avoid Paying More Tax than Necessary
Don’t pay additional capital gains tax on overvalued London homes. - Appeal to the District Valuer
Obtain the evidence you need to raise a dispute if your tax obligations have been miscalculated.