Capital Gains Tax (CGT) is a tax applied to the profit made when selling or ‘disposing’ of an asset that has increased in value.
The tax is calculated on the gain rather than the total sale price, making it essential to assess how much profit has been made on assets such as property, shares, business assets, and valuable possessions like art and jewellery.
At Capital Counts, we help individuals and businesses understand and manage their CGT liabilities, ensuring compliance with HMRC regulations while identifying potential tax-saving opportunities.
Who Needs to Pay Capital Gains Tax?
Not all asset sales are subject to CGT. Exemptions include your main residence, gifts to a spouse or civil partner, donations to charity, and certain tax-advantaged accounts like ISAs and pensions. However, if you sell a rental property, shares (outside an ISA), or high-value personal items, you may need to pay CGT.
Current Capital Gains Tax Allowances & Rates
The annual CGT allowance—the amount of profit you can make before paying tax—has been significantly reduced in recent years. As of 6 April 2023, the exemption was lowered from £12,300 to £6,000, and it will drop further to £3,000 from April 2024. Any gains above this threshold are taxable.
The CGT rate you pay depends on your income tax band:
-Basic rate taxpayers pay 10% on most assets and 18% on residential property.
-Higher and additional rate taxpayers pay 20% on most assets and 28% on residential property.
How Capital Counts Can Help
With changing tax laws and reductions in CGT allowances, planning ahead is key. At Capital Counts, we offer expert CGT planning, calculation, and reporting services to help you manage your liabilities effectively. Whether you’re selling an investment property, disposing of business assets, or navigating complex tax scenarios, we provide tailored advice to minimise your tax burden and ensure full compliance with HMRC.
Get in touch with Capital Counts today for professional guidance on managing your capital gains tax efficiently.
