What is my Capital Gains Allowance?
Currently, the Capital Gains Tax allowance is £12,300. This represents the total amount of gains a person can make before they are liable to pay Capital Gains Tax.
CGT applies for any gains over this threshold. The rate depends on several factors, including your income tax band, your total taxable income, and the assets involved (residential property has a higher rate than other assets).
I’m unsure whether I need to pay capital gains tax when selling an asset – can you help?
Yes. We work closely with individuals to determine whether they need to pay capital gains tax, or any other tax, on any significant disposal or acquisition. If CGT is applicable, we can help minimise your tax exposure and find an optimal solution through careful tax planning. Get in touch with one of our experienced chartered accountants to discuss your situation in more detail as part of a free consultation.
Are any assets not subject to capital gains tax when sold?
Yes, many assets may not be subject to capital gains tax, including charitable gifts, asset transfers between married couples, private and vintage cars, low-value possessions or the sale of your primary residence. However, this is a non-exhaustive list. You should speak to our team of experts if you are in any doubt about your liabilities.
I’m disposing of shares I own, is Capital Gains Tax due?
If you’ve exceeded your Capital Gains Allowance, then tax may apply to the profits you make from selling shares. There are exceptions though, such as selling shares within the tax-free container of an ISA or gifting shares to a partner or charity.
I’ve got a property overseas, do I need to pay Capital Gains Tax if I sell it?
Whether Capital Gains Tax is due on the sale of an overseas property depends on several factors. For UK residents, it’s typically due unless you are non-domiciled. Meanwhile, for non-UK residents, it depends on whether you return to the UK within five years of selling the property.
This is a very tricky area, so it’s well worth consulting one of our capital gains tax advisors to discuss your situation.
What if I make a loss?
If one of your chargeable assets makes a loss or becomes worthless, you can deduct it from your total gains for the tax year, which could reduce your Capital Gains Tax liability. This can be done as part of a self-assessment tax return or by writing to HMRC if you’re not required to register for self-assessment.
How and when do I pay?
The process for reporting and paying Capital Gains Tax depends on the assets.
For residential property sold after 6th April 2020, you may have to report your chargeable gains and pay tax within 30 days of the sale. It’s worth speaking to a tax advisor before and after the sale, so you don’t end up overpaying.
For any gains not made from property, you can pay straight away via the HMRC website or you can report them in a self-assessment tax return. We can help you complete a tax return.
