Capital Gains Tax

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax on the profit - or gain - you make when selling or disposing of an asset. It’s the gain you make that is taxed, not the amount of money you receive. You do not have to pay CGT if your gains for the tax year are below your yearly tax-free allowance.

Disposing of an asset includes:

• selling it

• giving it away as a gift, or transferring it to someone else

• swapping it for something else

• getting compensation for it - like an insurance payout if it’s been lost or destroyed

What is the CGT annual allowance?

The personal capital gains tax allowance has been slashed from £12,300 for 22/23 down to just £6,000 for the 23/24 tax year.

This capital gains annual allowance is the amount of gains that an individual can make from the sale of their asset in any tax year. In certain circumstances, married couples can pool their allowances.

Capital Gains advice for individuals:

We regularly advise individuals on their CGT liabilities. This can be from the disposal of personal possessions, disposing of shares or often on the sale of a second property, whether this be a buy-to-let property or where an individual has become an accidental landlord, through marriage or inheritance.

Capital Gains advice for businesses:

We can advise businesses and shareholders on their CGT liability that may arise. CGT may have to be paid if a profit is made when all or part of a business or business assets is sold. This can include:

• Land & buildings

• Fixtures & fittings

• Plant & machinery

• Shares

• Disposing/selling goodwill of a company

Notifying HMRC of your liability and paying:

If the gain arose from a residential property sold since April 2023, this needs to be reported to HMRC within 60 days of the sale - with a payment made on account for the full amount) within the same time period.

A Capital Gains Tax on UK property account will need to be created before the tax can be reported and paid.

For UK residents reporting a residential sale between 6th April 2020 and 26th October 2021 you must report and pay within 30 days.

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