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Capital Gains Tax Advice

        

Capital Gains Tax (CGT) - Quick Summary of Capital Gains Tax Advice

 cgt rates 2011

cgt rates 2012

CGT is a Tax based on a valuable asset being sold such as a house or land
CGT does not apply when selling your own house or your own car
CGT will apply if you either sell, give away, transfer or swap an asset
The CGT payment threshold for the current tax year (2012/2013) is £10,600
CGT is a tax on the profit made on an asset or investment and is calculated over one tax year period
Everyone who is liable for Capital Gains Tax gets the same annual tax-free allowance (See Table below)
From 22/06/2010 onwards the Capital Gains Tax rate for Higher tax payers has increased from 18% to 28%

        

   Capital Gains Tax (CGT) Thresholds and Rates up to tax year:

2013 - 2014

Current CGT allowance and rates are shown below

Last updated:

         

Tax Year

Normal Rate Tax Payers

(income less than £34,370)

Higher Rate Tax Payers

(income greater than £34,370) 

 Allowance

Payment Rate

Allowance

Payment Rate

2004 - 2005 £8,200 20% £8,200 40%
2005 - 2006 £8,500 20% £8,500 40%
2006 - 2007 £8,800 20% £8,800 40%
2007 - 2008 £9,200 20% £9,200 40%
2008 - 2009 £9,600 18% £9,600 18%
2009 - 2010 £10,100 18%  £10,100 18%
2010 - 2011 £10,100 18%  £10,100

18% (up to 22/06/2010)  

28% (after 22/06/2010)  

2011 - 2012 £10,600 18%  £10,600 28%
2012 - 2013 £10,600 18%  £10,600 28%
2013 - 2014  £10,900 18%  £10,900 28%

Additional Notes:

(1)  From 2013 - 2014 onwards, it is planned that the CGT allowances will start to rise in line with the CPI (Consumer Prices Index) every year.

(2) Any Capital Gains Tax incurred during the 2012 / 2013 tax year needs to be paid on or before 31 January 2014.

Annual Exempt Amount

      

* The annual tax-free CGT allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax. Once the Annual Exempt Amount has been exceeded then the amount that you are required to pay is then calculated according to the percentage shown for that particular Tax Year.

As of April 2012, the consumer price index (CPI) will be used as the default indexation assumption for capital gains tax annual exempt amounts.

            

Get a 25 cash reward if you lend more than 2,000

or take out any sized loan   

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Entrepreneurs CGT Relief

Entrepreneurs' Relief allows individuals and some trustees to claim relief on qualifying gains, up to a maximum lifetime limit, made on the disposal of any of the following:

   All or part of a business

   The assets of a business after it has ceased 

   Shares in a company 

The Entrepreneurs Relief applies from 2008 onwards. In a series of recent announcements aimed at small businesses, the Chancellor has also announced plans to double the size of the lifetime limit on capital gains qualifying for entrepreneur's relief - to £10m. Entrepreneurs' relief reduces the amount of the capital gain a vendor will be taxed on for the disposal of any qualifying business assets that occurred on or after 6 April 2008.

Who qualifies for CGT Relief?

The relief is available for you as an individual if you:

   Are in business, for example as a sole trader or as a partner in a trading business

   Hold shares in your personal trading company 

See the glossary links below for more on personal and trading companies.

The relief is also available for some trustees.

Entrepreneurs' Relief is not available for companies.

    

Useful Capital Gains Tax Advice Websites                

       

    

How to keep your Capital Gains Tax 2014 bill as low as possible

(1) Keep all receipts and records for any of your assets on which CGT might eventually be due.

(2) Husbands and wives and civil partners each have a CGT allowance. Therefore transferring an asset into your joint names means that they can both make use of their tax free CGT allowance effectively doubling the allowed allowance from £10,100 to £20,200 from the tas year 2010/2011. However the transfer to your wife or partner must be a genuine outright gift.

(3) Items such as paintings, antiques and other collectibles can also represent a tax efficient investment. This is especially so where they can do not have to be treated as being a set and therefore can be sold off piece by piece within different tax years.

(4) Any unmarried partners can each nominate a different home as their main home in order to get Capital Gains Tax relief on both. However married couples and civil partners can only choose just one.

(5) If you happen to live in a property as your main home for a while before eventually letting it out, then you can potentially reduce your CGT bill when you eventually sell it.

(6) If you immediately sell any employee shares that you receive through a "Save as you earn" share option scheme or a company share option scheme or an enterprise management incentive scheme, then you may get  a CGT bill. However if you instead consider selling in several batches, so that each year's gain is within your annual tax-free allowance (£10,600 in 2011/2012) then you will be making best use of your CGT annual allowances.

(7) If you receive any shares through a "Save as you earn" share option scheme or a share incentive type plan, then you will have 90 days in which to transfer them tax-free over to an ISA or pension. This means that any gains you have made when you eventually come to sell will then be tax free.

       

Calculating CGT on your 1st Home

Capital Gains Tax (CGT) applies to gains from selling a range of assets. This includes a Capital Gains Tax on property - however CGT only applies where that property is not your main or 1st home. CGT applies to land, buildings and leases which are in addition to your first home. The Capital Gains Tax on property will apply to Capital Gains from the sale of any second homes or buy-to-let properties.

    

CAPITAL GAINS TAX CALCULATOR FOR 2014 YEAR

     
Click here to access Capital Gains Tax Calculator for 2013 to 2014
   

FURTHER TAX ADVICE PAGES SIMILAR TO CAPITAL GAINS TAX

    

You may also find Inheritance Tax Planning useful

You may also find Stamp Duty Rates useful

 

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NEED FURTHER HELP?

Capital Gains Tax Guide

By Carl Bayley BSc ACA & Nick Braun PhD

This brand new Capital Gains Tax guide contains lots of Capital Gains Tax saving strategies for property owners and investors.

Written by one of the country's most respected property tax experts, the information contained in this guide could save you literally thousands of pounds in Capital Gains Tax for 2013.

With plenty of examples and plain English summaries, it also contains the clearest explanations that you will find anywhere of how property Capital Gains Tax is calculated. Make sure that your CGT calculations are correct, otherwise you could finf yourself either paying too much CGT one way or getting a hefty fine for not paying enough CGT the other way.

Property Capital Gains Tax has just been published and is completely up to date. It is essential reading for:

Click the picture below for more details

2012/2013 Capital Gains Tax (CGT) Book

    All landlords and buy-to-let investors

  Testimonials from satisfied customers

    Everyone who owns a second home, either in the UK or abroad
    Anyone wanting tried and tested ways of legally paying less capital gains tax
    Plus all the tax saving tricks the tax professionals keep up their sleeves
    Anyone wanting to know how to calculate capital gains tax for 2013 (CGT rates 2013)
  

What Information is Contained in the Guide?

Subjects covered include:

   

The new Capital Gains Tax rules, announced in the Budget

How to reduce your taxable income and pay CGT at 18% instead of 28%

How one property investor saved over £30,000 by paying 18% instead of 28%

How your spouse or partner can save you £17,768 per year in Capital Gains Tax

How your children and siblings can help you avoid Capital Gains Tax completely

How trusts can be used to safeguard children's properties

Main residence elections - how to enjoy a tax-free second home

Plus some special tricks on how to obtain extra tax savings on multiple properties

How unmarried couples can have two tax-free main residences - plus the CGT traps to avoid

How to develop only part of your home and therefore avoid CGT

How to avoid being classified as a property trader and taxed at 41% or 51%

The benefits and drawbacks of using a company to invest in property

The new Entrepreneurs Relief rules - How to pay tax at 10% and save up to £1.8 million

How to convert heavily taxed income into leniently taxed capital gains

Absolutely everything there is to know about the Principal Private Residence Exemption

Plus how property investors can milk every drop of tax savings out of this fantastic loophole

How Private Letting Relief can shelter an extra £80,000 per property from the taxman

How to distinguish between home improvements and repairs and obtain the best tax outcome

Re-mortgaging your properties - the dangers banks and brokers don't want to tell you about

How to completely avoid Capital Gains Tax if you choose to emigrate  

The enormous tax benefits of furnished holiday lets, including rollover relief, loss relief and 10% CGT

Using Enterprise Investment Schemes to postpone CGT and save up to £100,000 in income tax

    

Click the picture below for more details

   Capital Gains Tax (CGT) Book 2012

  Testimonials from satisfied customers

 

       

If you think this book might be of interest to others then please let them know via the options below:

      

 

  

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