Capital gains tax is the tax paid when you sell an asset
Scenario 1: You buy a property for £100k and sell it for £500k. This means a profit of £400k. At the highest CGT tax rate of 28%, your tax bill would be £112k.
Scenario 2: You buy and sell 3 houses within a 12-month period and make a £400k profit? In the eyes of HMRC, this could a property trading business and the tax rate could be as much as 47% which means a tax bill of £188k!
This is why structuring your deals is critical. If you have a question or are worried about your tax affairs, contact us today for a free non-obligation chat.
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