Capital gains tax on selling a commercial property can be a significant consideration for property investors and business owners. This tax applies to the profit made when selling a commercial property, and understanding its intricacies is essential for effective financial planning.
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What is capital gains tax on selling a commercial property?
Capital gains tax (CGT) is levied on the profit made from selling a commercial property. It’s calculated as the difference between the purchase price and the sale price, minus any allowable expenses.
How is capital gains tax calculated on commercial property?
To calculate CGT on commercial property:
- Determine the property’s sale price
- Subtract the original purchase price
- Deduct any allowable expenses (e.g., improvement costs, legal fees)
- The resulting figure is your taxable gain
The tax rate applied to this gain depends on your income tax band and how long you’ve owned the property.
What are the current CGT rates for commercial property?
For the 2024/25 tax year, CGT rates on commercial property are:
| Income Tax Band | CGT Rate |
|---|---|
| Basic rate | 10% |
| Higher rate | 20% |
These rates apply to gains above the annual CGT allowance, which is £3,000 for 2024/25.
What expenses can I deduct to reduce my capital gain?
You can deduct various expenses to lower your taxable gain, including:
• Estate agent fees
• Legal costs
• Stamp Duty Land Tax paid when buying the property
• Costs of improvement works (but not regular maintenance)
Remember to keep all receipts and documentation to support your claims.
Tips for managing CGT on commercial property:
• Plan ahead: Consider the tax implications before deciding to sell
• Time your sale: If possible, sell when your other income is lower to potentially benefit from a lower tax rate
• Use your annual CGT allowance: Spread disposals across tax years to make the most of your yearly exemption
• Seek professional advice: Tax rules can be complex, so consult with a tax specialist or accountant
Unlocking Opportunities: Selling Commercial Property with Property Saviour
When considering selling your commercial property, Property Saviour offers a unique and hassle-free solution that can benefit you in multiple ways. As real cash buyers, we can complete the purchase quickly, often within just 10 days or at a timescale that suits you. This means you can access your funds faster and move on to your next venture without the usual delays associated with traditional property sales.
One of the key advantages of selling to Property Saviour is our commitment to transparency and fairness. Unlike some buyers, we never lower our agreed price before exchange of contracts, giving you peace of mind throughout the process. We also cover at least £1,500 towards your legal fees, making the transaction even more cost-effective for you.
If you’re dealing with problematic tenants, outstanding charges, or other property-related issues, our experienced team can help navigate these challenges. We specialise in buying any type of commercial property, regardless of its condition or current occupancy status. Why not get in touch with us today to discuss your commercial property and see how we can help you achieve a quick, stress-free sale?
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
