Capital Gains Tax Accountants

This is the term used for capital assets that are subject to CGT when 'disposed of', meaning that it is sold, given away, swapped for another asset, or ownership is transferred to someone else.

Common examples include:

• Property (other than your main home) - This includes residential investment properties, buy-to-let properties, second homes, and property inherited from another party. Many of our clients are property investors and landlords, as this is a notoriously tricky area to negotiate.
• Shares and securities (not held in an ISA or PEP) - This includes stocks, bonds, and other investments held outside of tax-advantaged accounts.
• Business assets - This includes equipment, machinery, and other assets used in running a business.
• High-value personal possessions - Any personal possession sold for £6,000 or more (excluding cars) can be subject to CGT.
• Capital Gain - This is the difference between the acquisition cost (what you paid to acquire the asset) and the disposal value (the selling price or market value at disposal).
• Tax Rates - The rate of CGT you pay depends on your income tax band and the type of asset disposed of.
• Exemptions and Reliefs - Several exemptions and reliefs can help reduce your CGT liability or even eliminate it altogether. These depend on the type of asset and specific circumstances.
• Disposal - This broadly refers to any event where you relinquish ownership of an asset, including selling, gifting, or transferring it.

• Annual Exemption - Each individual is awarded an annual tax-free allowance for capital gains (currently £6,000). Gains below this threshold are exempt from CGT.
• Main Home Exemption - Gains made on the sale of your principal private residence (main home) are generally exempt from CGT, subject to certain conditions.

Working your way through these areas can be a chore, and it's easy to become confused when trying to calculate capital gains tax liabilities.

If you've been struggling with this, or you're not looking forward to facing this task in the future, Prescient Accounting offers first-class capital gains tax advice and support to get you up to speed.

Prescient Accounting's Capital Gains Tax accountants can help you with:

• Understanding Capital Gains Tax Rules and Regulations. Decipher the complicated world of CGT, including current rates, allowances, and reliefs.
• Proactive Tax Planning. Develop strategies to reduce your CGT liabilities by carefully timing disposals and available exemptions.
• Accurate Calculations. Ensure accurate CGT calculations and reporting to HMRC.

• Handle Complex Disposals. Assist with complex situations like the sale of inherited property or business assets.
• Peace of Mind. Gain confidence that your CGT affairs are handled expertly, safeguarding you from costly errors or penalties.

Our Capital Gains Tax advice covers every facet of this complex subject, so feel free to contact us and

Staying up-to-date with the latest CGT rules is imperative. For the current tax year, here are some key points:

• Capital Gains Annual Allowance. Each individual has an annual Capital Gains Tax allowance or exemption (£12,300 for the 2023/24 tax year). Gains below this threshold are tax-free.
• Capital Gains Tax Rates. CGT rates depend on your income tax bracket. Basic-rate taxpayers pay 10% on most assets and 18% on residential property. Higher-rate taxpayers pay 20% or 28%.

It's important to be aware that tax rules and allowances can – and do - change. Our qualified tax advisors will always provide the most up-to-date information.

Those residing in the UK generally pay CGT on most chargeable assets, regardless of their location for tax purposes. This encompasses:

• UK property - Residential and non-residential, including second homes, inherited or buy-to-let property. CGT relating to residential property is probably the most common form of Capital Gains Tax paid in the UK, and most of our clients need help in this area.
• Overseas properties - As a UK resident, you are subject to CGT on worldwide assets, including the sale of overseas properties. This is a tricky area, as you may end up paying tax in the UK and the country where the property is situated.
• Businesses - While businesses generally pay Corporation Tax rather than CGT, they may have to pay tax when part or all of a business or its assets are sold or given away. This could include land and buildings, fixtures and fittings, equipment or trademarks.
• Other chargeable assets - Such as shares (not held in an ISA or PEP), business assets, and valuable personal possessions exceeding £6,000 in sale value.

Anyone officially residing outside of the UK will only pay CGT on specific chargeable assets:

• UK property or land (residential and non-residential) - Sold on or after 6th April 2020. This includes property that's inherited or held in a trust.
• UK shares - Disposed of within five years of leaving the UK.

• Spouses and civil partners. When married or in a civil partnership, CGT allowances and exemptions can be transferred between partners, potentially reducing the overall tax burden.
• Inheritance. Assets inherited typically receive an uplift in their base cost to the market value on the date of inheritance, potentially reducing the capital gain for CGT purposes. Prescient Accounting also provides specialist Inheritance Tax accountants, should you require expert advice and support on the matter.
• Exemptions and reliefs. Several exemptions and reliefs can help reduce your CGT liability (See below for more details).
• Remember - Your taxable income plays a role in determining the rate at which you pay Capital Gains Tax (CGT) in the UK, not whether you pay it or not.

• Entrepreneurs' Relief (formerly Business Asset Disposal Relief) offers a reduced CGT rate of 10% on qualifying lifetime gains up to a lifetime limit of £1 million (as of March 2024). This applies to disposals of assets owned by individuals in trading businesses they actively participate in.
• Rollover Relief (or Holdover Relief) allows deferring the payment of CGT when reinvesting proceeds from the sale of qualifying business assets into new ones.
• Seed Enterprise Investment Scheme (SEIS) Relief offers income tax relief and exemption from CGT for investments in qualifying small, early-stage companies.
• Enterprise Investment Scheme (EIS) Relief provides income tax relief and potential capital gains exemption for investments in qualifying smaller, growing companies.
• Investments in Knowledge-intensive Companies (KICs) offer income tax relief and potential capital gains exemption for investments in qualifying knowledge-intensive companies.

• Annual Exemption - Each individual has a yearly tax-free allowance for capital gains (£6,000 for the 2023/24 tax year). Gains below this threshold are exempt from CGT.
• Principal Private Residence Relief (PPR) - Exempts gains made on the disposal of your main home, provided certain conditions are met.
• Gifts to Spouse or Civil Partner - Generally, transferring assets between spouses or civil partners is exempt from CGT.
• Gifts to Charity - Donating assets to registered charities can be exempt from CGT in certain situations.

These are often referred to as the 'special Capital Gains rules', and it's a good idea to explore them as fully as possible to reduce your Capital Gains Tax liability.

It's also crucial to remember that eligibility for these reliefs and exemptions can be complex and subject to specific conditions and limitations. That's why it's always recommended to seek professional advice from a qualified CGT accountant - like those at Prescient Accounting - to determine which reliefs and exemptions might apply to your individual circumstances to reduce your Capital Gains Tax bill.

And with Prescient Accounting, you can be sure of the very best Capital Gains Tax advice.

This is the standard method for reporting most capital gains, and it applies to the following:

• Shares and securities (not held in an ISA or PEP) - Stocks, bonds, and other investments outside tax-advantageous accounts.
• Business assets - Equipment, machinery, and other assets used in running a business.
• High-value personal possessions - Any personal possession sold for £6,000 or more (excluding cars).

If you haven't already, register for Self Assessment with HMRC. This is a free online process.

Once registered, complete a Self-assessment tax return for the tax year in which you disposed of the asset. The deadline for filing your return and paying any CGT owed is usually 31st December, following the tax year of disposal.

Within your return, declare the capital gain, including details like the asset type, purchase cost, disposal value, and any relevant reliefs or exemptions.

This method is specific to reporting capital gains on the disposal of UK residential property (including inherited) sold on or after 6th April 2020.

You'll need a Government Gateway user ID and password. Create one if you don't have one when registering for the Capital Gains Tax on a UK Property account.

Report the disposal through the online account, providing details like the property address, purchase and sale dates, and any relevant reliefs.

After submitting your report, HMRC will issue a reference number. Use this reference number to pay any CGT owed before the deadline.

Always keep accurate records of your asset purchases and disposals, including receipts and invoices.

Reporting a capital gains tax (CGT) loss can offer several advantages, allowing you to offset potential future capital gains and ultimately reduce your overall tax liability. Here's how you can benefit:

• Reduce Your Tax Bill - By reporting a capital gains loss, you can deduct that loss from any capital gains made in the same tax year. This directly reduces the amount of profit subject to CGT, lowering your tax bill.
• Offset Against Future Gains - You can carry those losses forward indefinitely if your capital losses exceed your gains in a particular tax year. These losses can then be used to offset Capital Gains Tax in subsequent tax years, potentially reducing your tax bill for years to come.
• Maximise Allowances - Even if your total capital gains for the year fall below the annual exemption (£6,000 for the 2023/24 tax year), reporting a loss can still be beneficial. This is because you can utilise the full annual exemption alongside your capital loss to further reduce your taxable capital gains.
• Become Tax Efficient - Reporting capital losses allows for a more strategic approach to tax planning. By understanding your CGT position, you can make informed decisions about future asset disposals, potentially timing them to maximise the use of losses and minimise your overall tax burden.

Our Capital gains tax advisors will talk you through the process so everything falls into place.

• Initial Penalty - £100 for filing your CGT return late, applied after one day of the deadline passing.
• Daily Penalty - An additional £10 per day can be charged for up to 90 days after the initial three-month late filing period. This means a maximum penalty of £900 for very late submissions.

After six months and twelve months of the deadline passing, there are additional penalties based on the higher of:

• £300 flat fee.
• 5% of the tax owed.

HMRC will also charge interest on any unpaid CGT from the date the payment was due. This interest accrues daily.

HMRC can impose harsher penalties if they believe you deliberately withheld information to avoid paying CGT. These penalties can be:

• Up to 100% of the tax owed or £300 (whichever is greater) for deliberate but not concealed withholding.
• Up to 100% of the tax owed and potential criminal prosecution for deliberate and concealed withholding.

It's wise to file your CGT return on time. The deadline for filing your CGT return is usually 60 days after the completion of the sale.

The deadline for paying your CGT is usually the same as the filing deadline (60 days after the completion of the sale), and it's essential that you meet this.

Our qualified CGT accountants will organise your tax affairs to ensure you meet the filing and payment deadlines and avoid potential penalties.

Capital Gains Tax in the UK is a tax on the profit when you sell, or 'dispose of', an asset that has increased in value. It's the gain you make that's taxed, not the amount of money you receive.

To calculate Capital Gains Tax on property in the UK, subtract the purchase price and any allowable expenses from the selling price. The difference is your gain, on which CGT may be due.

Yes, you can reduce your Capital Gains Tax bill in the UK by using your annual tax-free allowance, deducting allowable expenses, and utilising reliefs like Private Residence Relief.

For the 2023/2024 tax year, the Capital Gains Tax rates in the UK are 10% for basic-rate taxpayers and 20% for higher and additional-rate taxpayers, with higher rates for property gains.

The Capital Gains Tax allowance in the UK allows you to earn a certain amount of gain each year without paying tax. For the 2023/2024 tax year, the allowance is set at £12,300.

Entrepreneurs' Relief, now known as Business Asset Disposal Relief, qualifies for a lower CGT rate of 10% on qualifying assets, up to a lifetime limit of £1 million, for those selling or closing their businesses.