If the asset is worth less and you make a loss, then this loss may reduce any CGT you have to pay on sales of other assets. You are liable to pay tax on the total capital gains arising on disposals you make in any one tax year should they exceed the annual exemption limit.

Rules Around Capital Gains on Property

Property capital gains or real estate capital gains is the most common asset to attract Capital Gains Tax, you may have to pay Capital Gains Tax when you sell or dispose of a piece of land or a property that's not your main home. You usually don't have to pay Capital Gains Tax when you sell, give away, exchange or otherwise dispose of your own home.

There are things you can do to reduce or eliminate Capital Gains Tax. Many people rent out houses that were once former homes, this is especially true of people of move in together to live in one property while letting out the other. Reliefs available here are Principal Private Residence Relief and Lettings relief, these could complete remove any chargeable gain. Unmarried couples they are allowed to nominate a different home as their main home and can therefore receive the reliefs on both houses. Married couples, sadly, can only nominate one house as their main home.

For example  if you make a gift of a second home to your children, you'll have to work out if there's any Capital Gains Tax to pay on the disposal of the property at that time.

In some cases you're treated as if you've disposed of an asset. For example a building has been destroyed and you've received a capital sum, such as an insurance payout, by way of compensation.

There are a lot of things to consider and you should seek expert advice before selling any property that is not your main home.

Use Tax Advantage for Disclosing your Capital Gains

Tax Advantage offers:

• Advice on Capital Gains.
• Ensure you use all available allowances and exemptions
• Fast efficient service

Tax Advantage will calculate exactly how much Capital Gains/Losses you have. Once your Tax Return has been approved by you we will submit the form to HMRC advising you of how much to pay and when to pay it.

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