Detailed guide: Capital Gains Tax on high value residential property

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Updated: The ‘Overview’ section has been updated.

Overview

You’ll need to pay Capital Gains Tax (CGT) called ATED-related Capital Gains Tax if you sell a residential property which is completely or partly owned by a:

  • company
  • company that is a partner in a partnership
  • collective investment vehicle, for example a unit trust or an open-ended investment company

The ATED-related Capital Gains Tax threshold is £500,000 for sales on or after 6 April 2016. Before then, it was:

  • £2 million for proceeds of sales from 6 April 2013 to 5 April 2015
  • £1 million for proceeds of sales from 6 April 2015 to 5 April 2016

You don’t pay ATED or ATED-related Capital Gains Tax if you own the property direct, rather than through a company.

If you’re a non-resident company find out more about CGT when selling (or disposing) of a UK residential property.

How much your company will pay depends on how long it has:

  • owned the property
  • been paying ATED on the property

You can find examples on how to calculate payment in the CGT manual.

The rest of the gain or loss may be chargeable to Corporation Tax or normal CGT.

You should tell HM Revenue and Customs if you have an ATED-related Capital Gain by completing the ATED-related Capital Gains Tax return form.

You’ll need to pay by 31 January following the end of the tax year.

Find out the ways to pay your ATED-related Capital Gains Tax.


Source: HMRC