I bought a house eight years ago, and it has been rented out ever since. I am not living there; I am living at my parent’s house, so basically it has been rented out ever since I bought it on a buy-to-let mortgage. I am thinking of selling it because I want to buy a bigger home. Will I have to pay tax on it and, if so, what tax would that be?
Arthur Weller replies:
If the amount you sell it for is more than you paid for it, you will have to pay capital gains tax on the gain. The first £12,300 of your gains in a tax year is tax-free. The remainder of the gain is taxed at 18% if it falls in your basic rate tax band, and any part of the gain that falls above your basic rate band is taxed at 28%.