Capital
Gains Tax

“Tax you pay on profit or gain realised when you dispose of (or ‘sell of’) an asset which has increased in value”


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What is Capital Gains Tax (CGT)?

A tax levied on the profit made on sale of any non-inventory qualifying assets is called capital gains tax. Bonds, stocks, Property, real estate, and precious metals when sold are subjected to capital gains tax. If you make a Gain (i.e., a Profit), then you may be liable to pay taxes. The amount of tax chargeable will differ depending on type of asset sole, how long it was held, how the asset was utilised etc.

CGT is applicable to both individuals as well as businesses, however, the tax rates may well be different for both. Similarly, the tax allowance or tax bands may also differ for each.

Our Capital Gains Tax Service

Advice from Qualified Staff

We are qualified Tax Advisor and are regulated by the Association of Taxation Technicians (ATT) and the institute of Chartered Accountants in England & Wales (ICAEW).

CGT is a complex area of Taxation and often will relate to high value items such as property or shares that makes it essential that you get professional tax advice. We have years of experience in helping our clients with CGT and we will only get involved where we have the right knowledge and expertise to ensure you make the most of any tax reliefs available and plan your disposal to minimize your tax liability.

Complete Service

We provide a complete CGT service from planning your disposal, determining your options, reliefs you may be eligible for to computing and submitting your CGT return. Significant amount of tax can be saved when the purchase or disposal of assets are planned properly.

Our specialist tax adviser will handle the entire tax return process, deal with HMRC on your behalf, and provide full support throughout the process until completion. You will never find yourself alone or burdened again.

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After 25 years of running a business I have finally found the ideal accountants. They offer a great service integrated perfectly with the online software. They handle all my compliance efficiently and rapidly respond to my queries.

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Our Specialist CGT Service

Residential & Commercial Properties

Residential Property is one of the most common forms of Capital Gains Tax paid in the UK. Although your Principle Private Residence is normally out scope for CGT, but things can become more complicated if for part of the period your property was rented.

Buy-to-let properties on the other are almost always subject to CGT where a profit was realised when the property was sold.

There are various tax reliefs available such as;

  • Letting Relief
  • This relief is only available to landlords in certain circumstances and can reduce your CGT liability by upto £40,000
  • Private Residence Relief
  • This is to provide relief for the period you have lived in the property yourself

etc which can be applied to reduce your CGT liability.

We have helped hundreds of landlords and property investors with their CGT calculation. Our Tax advisory service goes beyond just the tax computation, there is a lot of potential tax saving when planned properly. This is where our expertise comes in, we advise you with different options so you can make a informed decision.

Shares & Stock Investments

Capital Gains on disposal of Shares need to apply special rules when compared to standard capital gains calculations. This is because, individuals may buy and sell number of shares from same company at different prices and at different periods in time. When shares are mixed in such way, it may be difficult to identify which shares are being sold and hence identify their purchase price.


Share Matching Rule Applied on Shares

Share Matching Rule needs to be applied to sale of shares. This rule applies to individuals only and does not apply to companies.

There are 3 matching rules:

  • If an individual disposes of shares, he is first deemed to have sold any shares he acquired on the same day
  • Next, the shareholder is deemed to have sold any shares he acquired in the following 30 days.
  • Finally the disposals will be matched with all other share acquisitions which are “pooled” together and form one asset for CGT purposes. These assets are called section 104 pool.

Further Complications

Additional complications can occur where there is a Bonus Issue, Rights Issues,
Free Issues or Take Over shares.
All of these require different treatment when it comes to calculating gains on shares

Chargeable Assets

Not all assets are subject to Capital Gains Tax, such as Cash, Wasting Chattels (a tangible, moveable property with less than 50 years of life. Unless an asset is specifically exempt under the legislation, all assets are subject to Capital Gains Tax. Make sure you are up to date with HMRC requirements with regards to chargeable assets.


Tax Rates

Tax rates and the calculation of gains differ based on the type of asset in question. Also, your tax band will also make a difference; for example, if you are a basic rate taxpayer, then you’ll pay 10%, whereas higher rate taxpayers will pay 20%. Again note, that gains themselves may push you to a higher tax band temporarily.

Capital Gains Tax Rates for the tax year 2019/2020:

You only pay tax on any net realised gain/profit that over you Annual Exempt Amount (your tax-free allowance) which for 2019/20 is set at £12,000 (£6,000 for trusts).

  • If you are a basic tax band rate payer, you will be levied capital tax gains at a rate of 10% for your entire capital gain. It will be 18% if the asset in question is a residential property.
  • If you are high rate tax payer, then you will be subjected to a 20% capital gains tax rate. It will be 28% in case the asset in question is a residential property.
Type of Asset Basic Rate Higher Rate
Shares 10% 20%
Residential Property 18% 28%
Bitcoin/Cryptocurrency 10% 20%
Other 10% 20%

It is crucial to keep in mind that you usually are not levied to pay any capital gains tax if you are selling your main home and not your second home.

Here is a list of capital gains tax rates per the assets in the table below:

Moving onto tax-free allowance, the annual exempt amount for individuals and trusts are listed down in the table below:

What about Gifts Or Inheritance assets received?

Gifts

Gifts received from family (grandparents, parents etc but no from spouse or civil partner) can also be subject to capital gains tax. Valuation and CGT calculation may be required at the time of gift disposal. It is important to speak to you tax accountant for further advice.


Inheritance

Property received through inheritance is subject to CGT when you sell it on. At this point, CGT calculation will need to be carried out, which will include value of the property when inherited, any capital costs incurred since then by yourself etc, to determine the CGT liability.

Need to do Capital
Gains Tax

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