What is Capital Gains Tax?
Capital Gains Tax is the tax you pay on any profit you make when you dispose of an asset that has increased in value. The amount of gain (or profit) you make is taxed, rather than the amount of money you receive from the sale.
Disposing of an asset refers to selling it, giving it away, swapping it for something else, or getting compensation for it (for example from an insurance claim).
What is Capital Gains Tax Paid on?
Capital Gains Tax is typically paid when you dispose of any of the following:
- Personal possessions worth over £6,000 (excluding your car)
- Any property that isn’t your main home
- Your main home if you’ve let it out, used it for business, or it’s very large
- Shares that aren’t in an ISA or a PEP
- Business Assets
Capital Gains on Property
CCGT is not usually payable on the gains you make on your only or main home, as these typically qualify for private residence relief (PRR). You should be aware, however, that, even if your property is your main or only home, part or all of the gain will be taxable if:
- You develop your home, for example by converting part of it into flats
- You sell part of your garden and your total plot is over half a hectare (1.2 acres)
- You use part of your home exclusively for business
- You let all or part of your home out
- You live away from the property
- You bought or improved the home partly or wholly for the purpose of making a profit
Capital Gains Tax Relief
Whilst Capital Gains Tax is becoming an increasingly common issue for both individuals and companies in London, there are many reliefs available and, with some careful per transaction planning, we can help to ensure that your exposure to Capital Gains Tax is minimised.
Using various techniques and our extensive experience, we can advise you on this complex issue and ensure that you obtain the optimum amount of relief you are entitled to.
CGT reliefs include:
- Deferral of the gain, by utilising rollover or holdover relief
- Gift relief, when certain assets are being gifted away
- Entrepreneurs’ Relief for business assets
For further information about Capital Gains Tax Relief and to discuss whether or not you will be eligible, please do not hesitate to contact our London office.
Capital Gains Tax Services in London
Based in London, our professional team of skilled, qualified, and experienced accountants are fully equipped with the tools, knowledge, and expertise to ensure that you are fully in line with legislation, whilst minimising the amount of Capital Gains Tax you must pay.
If you require any further information about our Capital Gains Tax Services, or any of our accounting services, please do not hesitate to contact us.