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Info/Query - CGT when selling a house as a LTD Company


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Hello,

Sorry if this has been answered elsewhere;

(this is a simplistic scenario)

If i bought a house say for £100k and sold for £150k , am i right in thinking a CGT of 19% would need to be paid on the £50k profit?

Am i wrong to think that CGT is only paid out on any profits at the end of the financial year?

So if i were to re-invest/pay out this £50k on another house/investment then there are no profits to pay the 19% out on? Or do you have to pay it regardless if you have made an overall profit at the end of the year or not?

Thanks


Alex

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CGT is paid at 18% or 28% depending on your marginal rate. The gain is added to your other income so if your £50k gain takes you into 40% bracket you will pay 28% on the portion over that level.

You can offset gains against losses, but using your gain to reinvest again does not remove the liability for CGT. CGT from a house sale must now be paid within 30 days of the sale. Any difference between tax de & tax paid will be sorted out at the end of the tax year.

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5 hours ago, alexb-d said:

If i bought a house say for £100k and sold for £150k , am i right in thinking a CGT of 19% would need to be paid on the £50k profit?

Alex - Because you are buying and selling in a limited company you pay corporation tax on any profit rather than capital gains tax. In the case of a sale of a property it can be corporation tax on a capital gain, just to confuse things. But you have the right idea. it is a simplified example but there would probably be frictional costs that that you could deduct when arriving at you profit figure to pay tax on.

5 hours ago, alexb-d said:

Am i wrong to think that CGT is only paid out on any profits at the end of the financial year?

It will be Corporation tax paid on any profits at the end of the accounting period for corporation tax, which is usually the same 12M as the companies financial year. You will pay CT assuming you have profits to pay tax on and no losses to utilise that might have been carried forward.

 

5 hours ago, alexb-d said:

o if i were to re-invest/pay out this £50k on another house/investment then there are no profits to pay the 19% out on? Or do you have to pay it regardless if you have made an overall profit at the end of the year or not?

The profits don't go away because you reinvest them. you pay CT if you make an overall profit if that makes sense.

David M Slater ACMA 

Accufy Accounting  - Proactive accounting for property investors 

0208 242 4926    info@accufy.uk

 

 

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