How to Tell HMRC You Sold Your UK Home?
Your UK residence status will determine whether you need to pay tax after selling (or ‘disposing of’) a residential property or land.
Even so, non-residents would only pay Capital Gains Tax (CGT) on any taxable gain made since the 5th of April 2015.
As a UK resident, the rules on tax when you sell your home are different from those for non residents (e.g. living abroad).
When You Can Get Tax Relief
As a rule, there would be no CGT due for any tax years where you, your spouse (husband, wife) or civil partner stayed in the UK home for a minimum of ninety (90) days.
Even so, to qualify for ‘Private Residence Relief’, you would need to nominate the property as being your only or main home when reporting and paying Capital Gains Tax on UK property (using your Government Gateway user ID and password).
When You Won’t Get Relief for the Final Period
Some exceptions to the rule mean you will not get the full tax relief for the final period for parts of the home you never lived in, such as if you:
- Let it out.
- Used it for business purposes.
Also, you would only get partial tax relief for the final period if the total grounds were greater than five thousand square metres (including all buildings).
When You Won’t Get the Full Relief
Even if you qualify for the relief in any given tax year, you may still need to pay tax if in that particular year, you (any):
- Let out part of the property (excludes having a lodger).
- Used part of the home solely for business purposes.
- Have a property where the total grounds (including all buildings) measure more than five thousand (5,000) square metres (a little over one acre).
Note: The ‘final period’ means you get full tax relief for the last nine (9) months of owning the property (as long as you qualify). But, being disabled (or living in long-term residential care) means the final period would extend to thirty six (36) months.
How to Work Out Private Residence Relief?
When you sell your residential property, you can calculate the tax relief using an online tool to determine:
- How much Private Residence Relief you will get.
- Whether you will need to pay Capital Gains Tax after selling (disposing of) your UK property.
But, you will not qualify for the tax relief if you only bought the property or land to make a gain. You would need to spend at least ninety (90) days in an overseas property to qualify for this type of relief (since the 6th of April 2015).
Note: HMRC produces detailed guidance explaining how to work out your taxable capital gain (or loss) as a non-resident selling UK property or land.
Related Help Guides
- Help guide for British nationals living overseas.
- Tax if you return to the United Kingdom after living abroad.
- Paying tax on your UK income while living abroad.
Note: The Capital Gains Tax guide explains more about how taxation on the profits realised after selling an asset works in Great Britain and Northern Ireland. You can also consider seeking expert advice from a professional tax adviser or an accountant.