Please can you tell me the rules regarding Capital Gains Tax on a second (rental) property?

Go to the website moneysavingexpert.com and post your question on the forum-lots of great answers on there!

When you sell the property, the sale will automatically be reported since it is registered in your name. You will have to report it as income, which means that you will be paying taxes on this income. The capital gains tax only helps you avoid paying taxes on your primary home.

Yes, you will be liable to CGT on this sale which will be charged at a straight 18%. The mortgage is irrelevent. If you sell after 6/4/08, the tax will be payable by 31.1.10 and you should contact HMRC to ask for a self assessment after 6/4/09.=, but if you have been correctly declaring this income, you will get a SA anyway.

First thing to know is that you need to tell the taxman. Profit is determined by taking into account any costs involved in the purchase and sale plus inflation needs to be taken into account and there is a standard system for working this out. Its pretty long winded so talk to an accountant who speciallises in this area. Its called Capital Gains Tax and you have an annual allowance which is currently £9,200 but will go up on 6/4. This has nothing to do with Income Tax. I assume you have been declaring the rent to the taxman? It is subject to income tax. So why has a perfectly correct answer been given 2 bad marks. There are idiots ruining the answer system so get back to nursery you saddos.

I suggest you get an official copy of the regulations concerning the handling of capital gains in your country, or have an accountant who should know about those things handle the matter for you. Heeding the advice of someone who doesn't have all the specifics about your personal finances could land you in deep trouble, and they won't have to pay the penalties and/or interest which may accrue as a result of erroneous information. You will!

Fengirl2's answer is OK. Gorilla: You got marked down because your answer is factually incorrect. Indexation went out in 1998.

You need an accountant. You can look at this site HM Revenue & Customs Responsible for the efficient administration of taxes and National Insurance contributions as well as customs and frontier protection. Previously Inland Revenue ... www.hmrc.gov.uk - 15k - Cached for an idea but there are so many things you can claim back that you will benefit from professional advice. The rules are changing on CGT so you need to be aware or you will get skinned by HM Government. Good luck, try and get as many deductable items as possible. Your local CAB may be able to help. Try this as a starter... Citizens Advice corporate website - Home Citizens Advice website provides information about the service, how to get ... Citizens Advice response to the new regulations for Employment and Support ... www.citizensadvice.org.uk - If you didn't declare the income from the rent you may have to pay tax on that too.