Capital Gains Tax (CGT) is a tax on the profit when you sell or dispose of an asset that has increased in value. This sounds a straightforward tax in principle, but there are at least four rates of tax that can apply to capital gains. To complicate matters further, you can be taxed either on proceeds you receive or on amounts you do not.
Whether CGT arises from selling property or disposing of shares or other assets, our trusted experts will guide and advise you on the most tax-efficient approach. Gains may be exempt from tax or they may be covered by reliefs, some of which apply automatically, some of which will need to be claimed.
Strict rules apply to determine what expenditure can be deducted to calculate a capital gain. You may also need to obtain professional valuations and agree these with HMRC.
You can report and pay Capital Gains Tax using the Capital Gains Tax on UK property service within 60 days of selling UK property, the ’real time’ Capital Gains Tax service and/or via your annual Self-Assessment tax return.
There are time limits in which capital losses need notifying to HMRC and these apply regardless of whether someone is registered for Self Assessment.
Capital losses may be:
- offset against capital gains (not always)
- carried forward against future gains (although they can be carried back in some circumstances)
- restricted and only set against a gain from disposing of an asset to the same person
- unable to be relieved against gains (or an election might be needed for losses to be allowable)
- set against taxable income in certain circumstances
How we can help?
If you need assistance with Capital Gains Tax planning or compliance matters, we can help.
We can help you plan for your sale or disposal of investments and company shares and advise you on earn-outs and your eligibility to Capital Gains Tax reliefs, including Business Asset Disposal Relief (formerly Entrepreneurs’ Relief), Investors’ Relief, Incorporation Relief and Gift Hold-Over Relief.
Our services include calculations and planning for sales of land and property and advice regarding private residence relief on disposals of residential property and main residence elections. We will calculate your tax liability, and prepare and submit your capital gains tax return, within the 60-day limit for reporting residential property gains and making tax payments to HMRC. This service and advice are also offered to non-UK residents who make direct or indirect disposals of UK property or land.
Our specialists advise our clients on Capital Gains Tax reliefs for share acquisitions under the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) and the tax reliefs available for failed EIS and SEIS investments.
With our wealth of knowledge and experience, we will also help you to notify losses to HMRC, including on irrecoverable loans and assets that have become of negligible value or – if you are a UK resident non-domiciled taxpayer – with tax losses on overseas assets. We will assist you with the necessary elections to ensure such losses are allowable for UK tax purposes.
