Capital Gains Tax For Individuals
As an individual, you may be liable to pay Capital Gains Tax on the profit you make from personal possessions, property that isn’t your main home, shares, cryptocurrency, and more. However, you don’t have to pay CGT on any gains made from ISAs, PEPs, government gilts and bonds, or the winnings/prizes from bets or lotteries.
If you’d like advice on your situation, get in touch with our team to discuss.
Capital Gains Tax For Landlords & Property Investors
As a landlord or property investor, you may need to pay Capital Gains Tax if you sell a commercial or residential property that’s increased in value since you bought it. You only pay CGT on your “chargeable gain”, which is the difference between the amount you paid for the property and the amount you’re selling it. You can deduct some costs (such as the cost of building an extension) and apply for tax relief. The two tax relief programs for CGT and property are:
- Private Residence Relief (PRR) – Several conditions are attached to Private Residence Relief, but if the property was once your main residence, you might be eligible.
- Lettings Relief – Landlords who lived in their residence alongside a tenant may be eligible for Lettings Relief.
Whilst this is a complex area, carefully planning the disposal of a property to minimise your tax liabilities can be incredibly beneficial. Get in touch today to discuss your property plans with our tax advisors
Capital Gains Tax For Businesses
As a business owner, you may need to pay Capital Gains Tax on the profit you make from selling or gifting your business - whether it’s the whole company or individual assets. This includes land and buildings, fixtures and fittings, plant and machinery, shares, and intellectual property like registered trade marks.
To calculate your CGT bill, you’ll need to work out your chargeable gain, deduct certain costs (like the cost of improving assets), and then apply for any relevant tax reliefs. Tax relief for businesses include:
- Business Asset Disposal Relief - Those who qualify for Business Asset Disposal Relief pay a tax rate of 10% on any gains, which could save you a significant sum. Various conditions apply, based on whether you’re selling the business itself, shares in the business, assets you’ve lent to the business, or if you’re a trustee.
- Incorporation Relief - If you transfer the ownership of your business to another company in return for shares in that company, you may be able to delay paying Capital Gains Tax until you sell those shares.
- Gift Hold-Over Relief - You may not need to pay CGT if you give away a business asset, but the person you give it to will have to pay when they sell the asset.
If you’re a business owner or shareholder, our team can help you understand and plan for any Capital Gains Tax that may be due from selling your assets.