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United Kingdom – Property Taxes

Property Tax

In the UK, a property tax known as council tax is levied on the owner of a property. The amount of council tax is determined by the value of the property and its location.

Capital Gains Tax (CGT)

If you sell a property for more than you paid for it, the difference is considered a capital gain and may be subject to capital gains tax (CGT). CGT is charged at a rate of 18% or 28% depending on your total taxable income and gains for the year.

Inheritance Tax (IHT)

Inheritance tax (IHT) may be payable on a property if it is passed on to a beneficiary as part of an estate. The current IHT threshold is £325,000. Any amount over this threshold is subject to IHT at a rate of 40%.

Gift Tax

There is no gift tax in the UK.

Tax on Property Income

If you rent out a property in the UK, you must pay tax on the rental income received. The tax rate on rental income is determined by your total taxable income and the rental income received.

Tax Advantages in Buying a House in the UK

There are no specific tax advantages in buying a house in the UK, however, the UK does offer a number of tax reliefs for homeowners, such as the mortgage interest relief, stamp duty land tax relief, and first-time buyer relief. These reliefs can reduce the amount of tax payable on the purchase and ownership of a property.

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