Capital Gains Tax Accountant
We offer expert Capital Gains Tax (CGT) services to ensure full compliance while maximising available reliefs, exemptions, or allowances. Our team of experienced Capital Gains Tax Accountants will help you minimise liabilities and avoid potential pitfalls.
What is Capital Gains Tax?
Capital Gains Tax (CGT) is a tax on the profit when you sell or dispose of an asset that has increased in value. The tax applies to the gain made, not the total amount received. For example, if you sell a second property for £350,000 after purchasing it for £250,000, Capital Gains Tax would apply to the £100,000 gain, minus any allowances or reliefs.
Do You Need a Specialist Capital Gains Tax Accountant?
The rules surrounding Capital Gains Tax are complex, especially when different types of assets and reliefs come into play. Hiring a specialist Capital Gains Tax accountant can help you manage your tax liabilities effectively. At eAccounts, we offer professional guidance to ensure you take full advantage of any available allowances and reliefs to keep your Capital Gains Tax bill as low as possible.
In the UK, the annual CGT allowance currently stands at £12,300. This is the amount you can gain from the sale of assets before you are liable to pay Capital Gains Tax. If your gains exceed this threshold, you will need to pay tax based on the type of asset sold and your income level.
Assets Liable for Capital Gains Tax
Not all assets are subject to Capital Gains Tax. However, some common examples of chargeable assets include:
- Personal possessions worth over £6,000 (excluding cars)
- Properties that are not your main residence
- Shares and investments
- Business assets
- Cryptocurrencies and other digital assets
For your main residence, CGT generally does not apply unless you have rented it out, used it for business, or it exceeds certain size limits.
At eAccounts, we explore every option to help you legally reduce your Capital Gains Tax liabilities. Some strategies include:
- Claiming losses: Offsetting losses from previous disposals against current gains.
- Transferring assets: Shifting assets to a spouse or civil partner to reduce liability.
- Using reliefs: Applying for Private Residence Relief or Business Asset Disposal Relief.
Private Residence Relief
When you sell your main home, you may be eligible for Private Residence Relief, which exempts you from Capital Gains Tax. This relief only applies if the property has been your primary residence throughout the ownership period. If you have rented the property or used it for business, CGT may apply to a portion of the sale.
Business Asset Disposal Relief
Formerly known as Entrepreneurs’ Relief, this allows business owners to reduce their Capital Gains Tax liability when selling or closing a business. Eligible individuals pay a reduced rate of 10% on gains. This relief applies if you’ve owned the business assets for at least 2 years, and meet certain conditions, such as being a sole trader or owning at least 5% of the company.
How eAccounts Can Help with Capital Gains Tax
Our team at eAccounts specializes in handling every aspect of Capital Gains Tax compliance. Whether you’re selling a second home, transferring investments, or dealing with complex assets like cryptocurrencies, we can ensure that your tax return is accurate and takes full advantage of available reliefs. Here’s how we help:
- Computation of Capital Gains: Calculating the exact amount of CGT due, including all allowable deductions and exemptions.
- Exploring Reliefs: We assess your eligibility for reliefs such as Private Residence Relief, Business Asset Disposal Relief, and more.
- Filing Your Self Assessment: We handle the preparation and submission of your Self-Assessment Tax Return, ensuring all CGT liabilities are reported correctly.
- Timing Asset Disposal: Strategic advice on when to sell assets to minimize CGT based on the tax year, your income, and other factors.
- Selling Investment Properties: If you’re a landlord or property investor, our Capital Gains Tax advisors will help you navigate the complexities of selling your assets while maximizing available reliefs.
- Gifting Assets: Gifting assets to family members could incur CGT unless it’s a spouse or civil partner transfer. We can advise on tax-efficient gifting strategies.
- Selling Shares or Cryptocurrencies: Whether you’re selling stocks, shares, or cryptocurrencies, understanding how Capital Gains Tax applies is crucial to keeping your tax bills in check.
- Inherited Properties: If you’ve inherited property, you might face CGT when selling it. We help you structure the sale to minimize tax liabilities.
Our experienced team of Capital Gains Tax accountants is ready to help you manage your tax affairs efficiently.
We provide tailored solutions that make full use of allowances and reliefs, ensuring you pay only what you need to. Contact us today for a free consultation and let us take the stress out of Capital Gains Tax compliance.
FAQ
Frequently Asked Questions
Can I avoid paying Capital Gains Tax?
While it’s not possible to completely avoid Capital Gains Tax, there are several legal strategies to minimize your tax liability. These include using your annual CGT allowance, claiming reliefs such as Private Residence Relief or Business Asset Disposal Relief, and offsetting losses against gains. Consulting a specialist Capital Gains Tax accountant can help ensure you’re paying the right amount.
How do I calculate my Capital Gains Tax?
To calculate Capital Gains Tax, subtract the original purchase price and any allowable expenses (such as renovation costs) from the sale price. The resulting capital gain is then subject to CGT, but only after deducting your annual CGT allowance (£12,300 for individuals). The tax rate will depend on whether you’re a basic rate or higher rate taxpayer, and the type of asset sold.
When do I have to pay Capital Gains Tax?
For property sales, Capital Gains Tax must be paid within 60 days of the sale completion date. For other assets, you’ll usually report and pay any CGT through your annual Self Assessment by the following 31st January. Late payments may incur penalties and interest.
Do I have to pay Capital Gains Tax on my main residence?
In most cases, your main home is exempt from Capital Gains Tax due to Private Residence Relief. However, if you’ve rented it out, used part of it for business, or the property exceeds 5,000 square meters, you may be liable for CGT on part of the gain.
How do I report Capital Gains Tax?
You can report Capital Gains either through your annual Self Assessment Tax Return or, for property sales, using the Capital Gains Tax online service. You’ll need to provide detailed information about the asset, purchase price, sale price, and any associated costs.
What happens if I make a loss on an asset?
If you sell an asset for less than you bought it for, you can report the loss to HMRC and offset it against future capital gains. This can reduce the amount of Capital Gains Tax you owe. You can claim these losses up to 4 years after the disposal.
Do non-UK residents need to pay Capital Gains Tax?
Yes, non-UK residents are still liable for Capital Gains Tax on UK properties and some other assets. For non-residential properties, CGT applies from April 2019. Even if you are abroad, you must report and pay the tax within 60 days of the sale.
What records do I need to keep for Capital Gains Tax?
You should retain records of the purchase price, sale price, any associated expenses, and proof of any tax reliefs claimed. This documentation will help ensure accurate CGT calculations and protect you in case of an HMRC audit.
What happens if I don’t pay Capital Gains Tax on time?
If you don’t pay Capital Gains Tax by the due date, HMRC may charge penalties and interest. For property sales, the tax is due within 60 days, while for other assets, it must be paid by 31st January following the tax year in which the gain was made.
Can I transfer assets to my spouse to avoid Capital Gains Tax?
Yes, transfers of assets between spouses or civil partners are exempt from Capital Gains Tax. This strategy can help reduce your CGT liability, especially if your spouse has unused CGT allowances or a lower income tax rate. However, this must be done before the sale of the asset.
Get a Free Quote Today!
Our unique quoting system delivers a tailored quote for your business in under 2 minutes! Click the button below to get started now!
