Capital Gains Tax

If something is sold for more than the purchase price then there may be tax to pay on the difference.

That is a very basic definition of capital gains tax – in reality the tax is a lot more complicated and varies depending upon where the sale is for a chargeable asset, whether it is an individual or company involved in the sale and what specific capital gains tax allowances and reliefs can/have been applied.

There is a separate tax allowance applicable to capital gains and it is unrelated to the tax-free personal allowance applied to general income. Capital gains tax is only charged upon the determined chargeable value once it exceeds the allowance amount.

Since 2006 the rates for capital gains have taken on a more complex structure with residential property being charged higher rates than other types of asset.

Companies making capital gains are actually making chargeable gains and these are treated as profits and charged corporation tax like other profits. There are factors that can reduce the amount perceived as ‘profit’ such as indexation allowance (inflation), reinvestment of the gain and investment schemes.

Services accountants can offer those with capital gains include:

1. Capital Gains Tax
2. Self Assessment Tax Return
3. Allowances and Reliefs
4. Capital Allowances
5. Corporation Tax
6. R And D Tax Credits
7. Property Tax