Tax Advisory UK
Capital Gains Tax (CGT)
What is Capital Gains Tax (CGT)?
Capital Gains Tax is a tax that needs to be paid on the profit on a sale of an asset that has increased in value over time. HMRC tax you on the gain that has been made and not the money you receive.
Tax Advisory UK has Chartered Tax Advisors (CTA) that are highly skilled and knowledgeable with using CGT reduction solutions which can help you save money on your investments.
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What you have to pay CGT on?
CGT has two different types of rates that can be taxed and they are CGT property rates and CGT asset rates. These rates also differ depending on whether you are a basic-rate taxpayer or a high-rate taxpayer.
| Tax Bracket | CGT rate on assets | CGT rate on properties |
| Basic-rate taxpayer | 10% | 18% |
| High-rate taxpayer | 20% | 28% |
You pay Capital Gains Tax on the gain when you sell:
- most personal possessions worth £6,000 or more, apart from your car
- property that’s not your main home
- your main home if you’ve let it out, used it for business or it’s very large
- shares that are not in an ISA or PEP
- business assets
With some asset’s you sell you may be eligible to claim a tax relief but you would need to speak with a tax advisor to know which assets are exempt.
If you share an asset with someone, which is sold, you will have to pay the CGT on your share of the profit.
There is an Annual Exempt Amount of £12,300 or £6,150 for trusts for CGT to be paid if these amounts are gained per year.
This also applies to:
- ISA’s or PEPs
- UK government gilts and Premium Bonds
- betting, lottery or pools winnings
CGT on gifts to your loved ones
Even though the guidelines above apply for most CGT there are special rules when gifting to your husband, wife, or civil partner. You do not pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner unless you separated in that year or you gave them goods to sell.
They must be warned that if they sell the assets in the future they could be eligible to pay CGT on the profit of when YOU first owned the property and when THEY sold it.
Calculating your CGT
When calculating your CGT you must work out the gain on all your properties, shares, possessions and sold businesses and add all your gains together.
You can add any ‘allowable losses’ which will be deducted from the total gains you made that year.
CGT on property
As the table above shows, there are different CGT rates on properties for basic-rate taxpayers and high-rate taxpayers.
You can also deduct costs such as solicitors fees, estate agents fees, and stamp duty when buying and selling properties to reduce your CGT.
For more technical help with Capital Gains Tax issues please contact Tax Advisory UK on 07908 074954. You will be asked to provide details of your enquiry and will be connected with a Chartered Tax Advisor.
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