Paying capital gains tax can be a complicated exercise. We can help you with effective tax planning.
If you sell an asset that is subject to capital gains tax, you need to advise the Inland Revenue when you make a capital gain or if you wish to claim a loss. To do this you need to complete a self-assessment tax return for the year in question. This is usually completed online or alternatively by using the paper based forms that are available from HMRC.
If you do not normally complete this return each year, you will need contact your tax office and request the return. If you don’t have access to the HMRC online self-assessment username and password, you will need to obtain one.
You do not need to report any gain if it is exempt from CGT. Residential property that is classed as your main home is usually exempt from CGT. Information about CGT gains on assets can be found on the HMRC website. If the gain is not exempt and below the CGT annual allowance of £11,300 for the tax year 2017/18, you should still complete the self-assessment tax return.
Keep good records
It is important to keep records of the purchases and sale of assets over the years. You should also keep records about any expenditure you may have incurred whilst owning the asset. Some of the expenditure may qualify to reduce the gain, depending on the type of expense. This will help you to work out potential gains and losses.
The calculations for some clients could be very complex and it is important that the correct figures are returned to the Revenue to ensure you are paying capital gains tax correctly. This link covers more information about capital gains tax rules.
We would recommend that you seek professional advice on any money matters from an appropriately qualified tax planner. when you are considering selling or gifting assets. The Government website www.gov.uk has a lot of useful information about paying capital gains tax.