Reader Question:
I will make £30,000 profit when I sell my flat. Will I pay capital gains tax on my profit?
My response:
That depends if it is your principal residence or not.
Ordinarily if you were to sell a property any profit which you make is liable to capital gains tax (currently at a rate of 18%). However, you do not pay capital gains tax on the sale of your principle residence i.e. where you live – this is known as Private Residence Relief.
However, if the flat is a second property (and not your principal residence) then you may be liable to capital gains tax. For more details and how you might mitigate any tax liability then read my article How to cut your tax bill on a second property sale.
If in doubt seek the help of a qualified accountant.
I hope that helps.
Damien
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