Deferring the property gain ― individuals

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

There are various capital gains tax reliefs which an individual can utilise to defer the capital gain on a property disposal until a later time, thereby postponing the tax bill. These are discussed below.

Categorising the gain

The first step in deciding what deferral reliefs may be appropriate to the taxpayer’s situation is to decide whether the gain on property relates to the disposal of a business asset or a non-business asset. Where the taxpayer disposes of a business asset, a wider variety of reliefs are available.

Non-business assets

A property business is often not considered to be a trade as the properties are held for investment purposes. If the property business were a trade, the sale of property would be a sale of stock and would therefore be chargeable to income tax. Whether the letting of property can amount to a trade is a question of fact.

This is discussed in the Transactions in UK land ― individuals and Application of the badges of trade guidance notes.

On this basis, the sale of a property

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