Tax services

CGT

Give a little to gain a lot

When you sell, give away or dispose of an asset, such as a second residential property or high-value item, you are liable to pay capital gains tax on the profits. How much you owe depends on whether you’re a basic rate or higher rate taxpayer, among other things.

The current rates for 2020/21 are 10% and 20% not including residential property and carried interest, and 18% and 28% for residential property and carried interest, and your annual allowance or Annual Exempt Amount (AEA) is £12,300.

CGT only applies to individuals, as companies are charged corporation tax on chargeable gains instead, and there are a number of exemptions and exclusions. We will help you to understand your CGT requirements and make sure you only pay as much tax as you’re legally obliged to.

Real-time CGT service

The government has launched a real-time CGT service to allow you to report any gains that are not made from selling UK residential property. The service can be used as soon as the gain and tax have been calculated on a disposal, and the deadline for reporting the gain in this way is 31 December after the year of the gain. The tax will be owed by 31 January the following year.

If you need to submit a self-assessment tax return for any other reason, you will also have to report any gains made on your tax return. We can help you to comply with the complicated CGT rules and make sure you pay no more or less than you’re legally required to.

CGT and non-domicile status

Your residency and domicile status (link here please!) has an impact on your CGT liability, we’ll make sure you make the best financial choice and comply with all tax rules, avoiding charges and penalties.

Forewarned is forearmed

Changes to CGT, in particular with regard to residential properties, may be coming in April 2021. It’s worth considering your potential tax burden now:

  • Are you letting a property which was once your main residence?
  • Are you considering selling or gifting a property?
  • Do you own any properties or assets that may be effected by tax changes?
  • Are you the sole owner of a property and you have a spouse or civil partner?

We will help you to identify any opportunities to minimise your CGT tax liability, saving you time and money.

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