Capital Gains Tax advice
Your Capital Gains Tax specialist
Are you looking to sell a property, shares, or your business? Our comprehensive capital gains service covers all aspects.
We’ll thoroughly explore various tax planning choices to ensure you minimize your tax liabilities and pay only what is necessary.
What is Capital Gains Tax (CGT)?
Capital Gains Tax refers to the taxation imposed on the profits earned from the sale of certain assets that are not part of inventory. Assets such as bonds, stocks, property, real estate, and precious metals are subject to CGT when they are sold. If you generate any gains from such transactions, you may have an obligation to pay taxes. The specific amount of tax payable varies based on factors such as the type of asset, the duration of its ownership, and its utilization.
Individuals CGT
This can arise from the sale of personal belongings like coins and jewelry, the sale of shares (excluding ISAs & PEPs) valued at £6,000 or more, or the sale of a secondary property.
Businesses CGT
If a profit is realized from the sale of a business or its assets, including land, buildings, fixtures, fittings, machinery, or shares, it may be necessary to pay Capital Gains Tax.
The service we offer for Capital Gains Tax
Complete service
Our comprehensive CGT service encompasses the entire process, from strategizing your asset disposal and evaluating available options to handling the filing of your CGT return. By preparing for asset transactions in advance, you can significantly minimize your tax obligations.
Regardless of the complexity of your tax return, our skilled tax advisor will provide you with personalized guidance every step of the way. Say goodbye to feelings of isolation or overwhelming tax burdens.
Advice from qualified staff
As certified tax advisors, we adhere to the regulations set by the Association of Taxation Technicians (ATT) and the Institute of Chartered Accountants in England & Wales (ICAEW).
Capital Gains Tax (CGT) is a multifaceted aspect of taxation that primarily pertains to taxable profits derived from the sale of valuable assets like property or shares. With our extensive expertise in CGT, we have assisted numerous clients over the years. Our goal is to help you maximize tax reliefs, strategically plan asset disposals to avoid unnecessary fees to HMRC and minimize your overall tax liability.
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Residential & commercial properties
Residential property stands as one of the primary instances where Capital Gains Tax is applicable in the UK. While your main residence typically falls outside the realm of CGT, the situation can become slightly more intricate if you rent out your property as a Furnished Holiday Let for a certain period.
On the other hand, buy-to-let properties generally attract CGT when they are sold for a profit.
To alleviate your CGT liability, certain landlords may qualify for Letting Relief, which can potentially reduce their tax obligations by up to £40,000. Private Residence Relief is another factor to consider, specifically for the duration during which you have personally inhabited the property.
We have extensive experience in assisting numerous landlords and investors in calculating their CGT. However, our tax planning service goes beyond mere calculations. Leveraging our expertise, we provide you with various options to make well-informed decisions.
Shares & stock investments
When it comes to the sale of shares, Capital Gains Tax follows specific rules that differ from standard calculations for capital gains. This distinction arises from the fact that individuals often purchase and sell shares from the same company at various prices and time intervals.
This mixing of shares can pose difficulties in determining which shares are being sold and their corresponding purchase price at the time of the sale.
Share matching rule applied on shares
The sale of shares necessitates the application of the Share Matching Rule, which specifically pertains to individuals and does not extend to companies.
Three matching rules govern this process:
1. When an individual sells shares, they are initially considered to have sold any shares acquired on the same day.
2. Subsequently, the shareholder is deemed to have sold any shares acquired within the subsequent 30-day period.
3. Finally, the disposals are matched with all other share acquisitions that are grouped together to form a single asset, known as section 104 pools, for the purposes of Capital Gains Tax (CGT).
Further complications
Additional complexities arise when dealing with situations such as bonus issues, rights issues, free issues, or business takeovers. Each of these scenarios necessitates distinct approaches when calculating gains on shares.
Chargeable assets
Chattels refer to possessions like antiques and collectibles. Certain chattels are exempt from Capital Gains Tax (CGT) on their gains. Items categorized as “wasting assets,” which have a lifespan of 50 years or less, fall under this CGT-free category. Pleasure boats, vintage cars, and caravans are examples of wasting assets.
Tax rates
The tax rates and computation of gains vary depending on the specific type of asset involved. Additionally, your tax bracket will impact the calculation. For instance, if you fall into the basic rate taxpayer category, you will be subject to a 10% tax rate, whereas higher rate taxpayers will face a 20% rate. It’s important to note that any gains you make could potentially push you into a higher tax bracket temporarily.
Need help with Capital Gains Tax
Speak to one of our Qualified Tax Advisors to see how we can help!
Capital gains tax rates for the tax year 2020/2021
You only pay tax on any net realised gain/profit that goes over your Annual Exempt Amount (your tax-free allowance), which for 2020/21 is set at £12,300.
It is crucial to keep in mind that you usually are not levied to pay any Capital Gains Tax if you sell your main home and not your second home.
What about gifts or inheritance assets received?
Gifts received from family, excluding spouses or civil partners, may be subject to Capital Gains Tax. This necessitates valuation and CGT calculation when disposing of the gift. Feel free to contact us for further advice.
When you sell an inherited property, it becomes liable for Capital Gains Tax (CGT). At that time, you will need to calculate the CGT, taking into account the property’s inherited value, any capital expenses you have incurred since then, and other relevant factors. This calculation will help determine the amount of CGT you are responsible for.
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