Capital Gains Tax Advice

What is Capital Gains Tax and how does it affect me?

If you need help with understanding what Capital Gains Tax is and how it affects you, the best thing you can do is to speak with one of our experts. We have all of our years of experience and knowledge to place at your disposal, ensuring you never pay more than you have to and that you keep on the right side of HMRC.

As an introduction, here is a brief outline of Capital Gains Tax, but remember that if you think you are liable to pay Capital Gains Tax then you really need to speak to an expert as this will usually save you money in the long run.

What is Capital Gains Tax and how does it affect me?

Capital gains tax (CGT) is a tax that you pay on an increase in the value of possessions during the time you have owned them, examples of which might be antiques, shares or a holiday home. Any tax is due to be paid when you dispose of the item, usually by selling or giving it away.

Individuals, companies, partnerships and trusts are liable to capital gains tax on the disposal of chargeable assets.

Until June 2010, capital gains tax was charged at a single rate of 18%. Since then, this has been changed to include two rates.

  • Basic rate taxpayers still pay CGT at 18%
  • Higher rate taxpayers are charged CGT at 28%

If you are a basic rate taxpayer due to your income, but your taxable capital gains have pushed you over the threshold above which income tax is levied at 40% (£31,785 taxable income in 2015-16), you will pay the higher rate of CGT on the portion of gains that takes you over the threshold .  

There is a 10% tax rate for disposals qualifying for Entrepreneur’s Relief.

You don’t have to pay tax on all capital gains. (And there are several steps you can take to avoid paying CGT). Speaking to Advance Accountants will give you the information and assistance you need to calculate your capital gains tax liabilities, and we can also help you with submitting your returns and also planning for the future to help minimise your capital gains tax liability.

 

Some of our frequently asked questions