Capital Gains Tax

Capital Gains Tax is charged against the profit made from when you sell something that you own. For example, Capital Gains Tax would typically be applied to the sale of Shares, Investment funds, second properties or the sale of a Business.

The taxable amount is based upon the increase in value from when the item was bought or obtained. It is the increase in value that is subject to Capital Gains Tax (CGT), and not the total amount of money you receive when the item is sold. The tax liability is also dependant upon your rate of Personal Taxation and the type of asset sold.

Individuals do have an annual Tax free allowance, where a certain amount of annual profit on the sale of assets is allowed to be made before CGT is applied, therefore if the profit from the sale of an item or items that you own falls below the annual Tax free allowance, then there would be no CGT liability.

Many people will encounter CGT when selling assets inherited from loved ones. Unlike Inheritance Tax, CGT would only be due when the asset is sold rather than at the point of inheritance. It is therefore important to retain the valuation of assets at the point of inheritance in order to be able to evaluate any future CGT liability.

However, as with many other taxes it must be considered how CGT could overlap with other taxation schemes. Stamp Duty, Income Tax, VAT and, as mentioned above, Inheritance Tax should all be taken into account when carrying out any CGT calculations otherwise you may fall foul of HMRC’s attention…

We can help with Capital Gains Tax

Barnstone Accountancy will work with you to make sure you only pay the absolute minimum of Capital Gains Tax as required by HMRC. We will discuss all available options open to you so that any resultant liability is the most Tax efficient possible, meaning you pay no more than is absolutely necessary whilst ensuring you remain compliant with all of HMRC’s requirements.

No fuss, jargon free and easy to understand.