Capital Gains Tax

Don’t be Caught Out by Capital Gains Tax!

One of the questions we are often asked by our clients is how much tax will they pay when they dispose of an asset. Capital gains tax is taxed as an individual’s top slice of income after taking off the annual allowance. The rate for CGT is currently 18% if your gain falls within your basic rate band and 28% where it doesn’t.

It is not just selling an asset as a whole that attracts CGT, a sale of part of an asset is also a chargeable event for this tax. This includes any assets damaged when compensation monies are received. Believe it or not CGT is also payable on the gift of an asset based on its market value.

Although capital gains tax applies to all individuals as well as trustees and personal representatives there are a number of statutory reliefs and exemptions available. At ISIS we are here to ensure that you do not miss out on these reliefs as they are only available if certain conditions are met.

One of the biggest decisions you may be faced with in life is whether to sell your business. Wouldn’t it be great to pay only 10% in tax from the proceeds you receive? Entrepreneur’s relief is available to individuals who sell either a business or an interest in a business or shares in a personal trading company. The relief can also extend to properties used by the business but not owned. If you assume that the relief is a certainty then you are wrong. A business with non trading activities or excess cash balances may mean the relief is not available.

Understanding capital gains tax is one thing but ensuring you pay the minimum is what an accountant should naturally do for you so Before you dispose of any assets call us today on 0845 345 7785.

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