1. What is Capital Gains Tax on Property?

Capital Gains Tax (CGT) is a tax on the profit when you sell (or dispose of) a property that's increased in value. It's the gain you make that's taxed, not the amount of money you receive.

2. How Does the Calculator Work?

The calculator uses the CGT formula:

Where:

• \( Sale\ Price \) — The price you sold the property for
• \( Purchase\ Price \) — The original purchase price
• \( Improvements \) — Cost of permanent improvements made
• \( Costs \) — Associated costs (legal fees, agent fees, etc.)
• \( Rate \) — Your applicable CGT rate

3. Importance of CGT Calculation

Details: Accurate CGT calculation is crucial for tax planning and compliance when selling property that's not your main home.

4. Using the Calculator

Tips: Enter all values in GBP. Include all eligible costs and improvements to accurately calculate your taxable gain.

5. Frequently Asked Questions (FAQ)

Q1: What counts as an improvement?
A: Permanent enhancements that add value (extensions, renovations), not routine maintenance.

Q2: What's the current CGT rate?
A: Rates vary (18% or 28% for residential property in UK, depending on income). Check current rates.

Q3: Is there a tax-free allowance?
A: Most countries have an annual exempt amount (e.g., £6,000 in UK 2023/24).

Q4: How is main residence treated?
A: Private Residence Relief usually exempts your main home from CGT.

Q5: When is the tax due?
A: In UK, report and pay within 60 days of completion for residential property.