Advice on Capital Gains Tax (CGT) Planning
What is Capital Gains Tax?
As a general rule, you may have to pay Capital Gains Tax if you sell something for more than you paid for it. Items that can attract CGT include shares, land and buildings, expensive antiques or jewellery, or parts of a business. You may also have to pay CGT if you give something away, or if you receive compensation or prize winnings.
Exceptions to the tax
If your gains come to less than the defined threshold you will not have to pay any CGT. You do not have to pay CGT if you are selling or passing on personal belongings that are worth less than £6,000, or if you give your assets away to a registered charity.
CGT does not apply when selling (amongst others) your main home, or when you receive money from Premium Bonds, lottery, or personal injury compensation.
How to get out of paying CGT
There are ways to avoid paying CGT that won't attract the taxman, although many of these ways simply defer CGT to a later date or transfer it to another person.
A popular method is to transfer your assets to your spouse or civil partner. You can also reduce the amount of CGT you have to pay by offsetting a loss.
CGT when you give something away
You may also expect to pay CGT when you give something away if the asset has increased in value since you bought it.
CGT on inheritances
You do not have to pay CGT if you inherit something. If you later sell or give away the asset, you may have to pay CGT then.
CGT is a complex tax to understand and calculate. If you have any questions please do just give your local office a call. We are always delighted to try and help.Contact us for an appointment
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