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A residential rate

07 December 2016 / Mark Wallace
Issue: 4579 / Categories: Comment & Analysis
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Which rate of tax applies to a capital gain on residential property? 

KEY POINTS

  • Different rates of tax now apply to upper rate special rate and other gains.
  • The importance of understanding the definition of a ‘residential property’ gain.
  • The Valuation Office guidance on residential properties and dwellings.
  • TCGA 1992 Sch B1 has no ‘permitted area’ test.
  • Allocating rates and exemptions in a worked example.

Finance Act 2016 s 83 introduces the changes to the rates of capital gains tax from 6 April 2016. Capital gains are now allocated into three categories. These are as follows.

  1. ‘Upper rate gains’. These arise from:
  • residential property;
  • non-resident’s residential property and
  • carried interest.

These gains are taxed at 28% subject to any unused element of the...

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