Capital Gains and Self Assessment when selling

jarweb

Hello
We have been renting out a single property for about 10 years - it used to be our home and we thought at the time it would be a good idea to then rent it out when we left.
We have been completing self assessment tax returns for a few years as we started to make a very small profit on the rental. Neither of us is self employed - we only do the self assessment for the rental income.
("We" means myself and my partner - not married or civil partnership)
We've decided we probably want to sell the property now as we're getting fed up with the increasing hassle of renting. 
I've had a quick look at the government web site re capital gains and it says you need to create an account for this which is fair enough - we have accounts for self assessment. So I "think" the capital gains is submitted separately from the self assessment ?
My question is - how does the capital gains fit in with self assessment with regards to income and outgoing costs ?  We will need to spend some money to make the property sellable and there will be other repair costs due to the state the house was left in by the previous tenant.  We will have had some income last year as rent but the house is currently empty so no income coming in.  
Would repairs and maintenance be offset against the rental income or go against the capital gains allowed costs ?
Or is this something that should really go via an accountant ?  We don't have an accountant at the moment.  I've never done a capital gains submission so I just don't know if this is a really complex question or pretty simple.
Thanks

ProDave

There is a separate section on the self assessment for capital gain.  You would need to check (or someone else may advise) but I think a recent change is you need to declare capital gain from a property sale immediately. Previously you waited until the end of the tax year and did it with the rest of your self assesment.

You are only liable for the capital gain for the period the property was let not the period it was your main residence, less 9 months.  the calculations are done on the basis of a linear gain from the day you bought it to the day you sold it.  then as it's jointly owned you are each liable for half the gain and if there is a taxable gain to pay you each get to use your capital gain allowance before calculating how much actually needs to be paid (unless you have already used your capital gain allowance that year on something else)

SonnyLumiere

ProDave gives good advice.
You can also use a web browser / search engine like Google Chrome.
Just for fun, I typed in "hmrc capital gains property sale".
Led me to https://www.gov.uk/tax-sell-property.
Seems to hit the spot!

Falafels

The way CGT is calculated and paid HAS changed recently...

Capital gains following a house sale is submitted separately to your tax return, initially - within 30 days of completion - and there's a link on the gov website which enables you to do this. If I recall correctly, it also tells you the documentation you're going to need before you start submitting your figures. Mildly tedious, but straightforward enough. The site will calculate any tax payable for you, you pay it within the 30 days, and you can download a pdf which summarises your answers.

The information will also then be needed when you fill in your self-assessment tax return at the end of the financial year - as well as the above.

If you've already been doing your own self-assessment then I doubt you'll have any problem with the CGT submission. I know some people feel intimidated by this sort of thing, and prefer to go through an accountant, so it really is a matter of personal preference.

jarweb

Thanks for the responses so far. I did see that there was a change where you now need to submit the capital gains within 30 days of selling.
Yes, we were a bit wary before we started doing the self assessments but once we'd done a couple of years it's OK.
As I said, the main thing I don't know at the moment is what costs go against the self assessments, which we'll still need to do as we've had some rental income last year, and what would go against capital gains if we sell the property.
It might become clearer when we actually go to do the submission but, since we haven't yet sold, we can't really start the process to see what's involved.   Was wondering if anyone else had been in a similar position.
Thanks

greatcrested

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

oldbikebloke

re costs, the eligibility of those costs depends on 2 things:
a) when did the letting business end ("cessation")
and
b) nature of the work: improvement (capital) or repair (revenue)

if the work is of a repair nature, ie reinstate the property to the condition it was in when first let and therefore it is more "sellable" that is NOT A CAPITAL COST since you are not creating something which did not exist before, you are repairing what was there.
The question then is such expenditure allowable against the final rental income? in the main the lettings business ends when the property is either reoccupied by the landlord as their own residence or the LL sells it.
PIM2510 - Property Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)

In your case you are selling a property you do not occupy so in principle any repairs can be claimed against the final income tax self assessment provided those costs meet the usual eligibility tests 
PIM2020 - Property Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)
It would be rather unlikely that you are going to incur capital expenditure on a property you are marketing for sale with the exception of the usual transaction costs eg: EA & legal fees on sale 
probably irrelevant in your case, but you could claim the cost of accountancy fees in working out the CGt liability and/or your final rental profit (ie the lettings business' accounts), but no fees in relation to the preparation of the SA tax return itself 



PS as already mentioned you have 30 days in which to declare and pay the CGT from the date of sale via the totally separate online CGT reporting process.
You must additionally declare that info again on your annual self assessment - the point being you may have used estimated figures at 30 days, so your tax return gives you the opportunity to declare actuals - you may then face an interest charge if you had underdeclared

jarweb

Thanks all.