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Posted Mon, 27 Mar 2023 13:07:00 GMT by nikki24C
Hi I have sold a rental property and trying to work out the capital gains tax. I put in a 25% deposit and then the rest was mortgage . When working out the gain do I deduct the 25% deposit I put in as that isnt actually a gain and was my own savings. Eg house was bought for £100K - £25k my own and £75K mortgage Sold for £200K - gave the mortgage company back the £75K thus leaving me with £125K in 'gains'. BUT £25K was money i put into it at the start. so is my gain actually worked out on £100K or are HMRC expecting me to pay it on the £125K ? Thanks
Posted Thu, 30 Mar 2023 14:12:05 GMT by HMRC Admin 25
Hi nikki24C,

How the property was financed, is not relevant to the Captial Gains Tax calculation; so deposits and mortgages etc can be ignored.

 The Capital Gains Tax calculation is only concerned with the purchase price and purchase costs, as well as the disposal amount and disposal costs.  

There is a tax calculator here:

Tax when you sell your home

This calculator will help you work out your gain.  

You can save the final calculation as a PDF file and then move to the next stage on the website, which is to create a Capital Gains account.

This account will allow you to report and pay and tax due.

 Please note that you need to report and pay any Capital Gains Tax within 60 days of the completion date, when disposing of UK residential property and land.

Thank you. 

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