Capital Gains Tax (CGT) is a key consideration upon the disposal of property. In many cases there will be reliefs available on the disposal of a property - and there will also be planning opportunities available. Capital gains tax is a very wide area, and there are a number of key considerations, and reliefs to consider.
In our practice, the issue of capital gains tax will arise on a regular basis, and we are delighted to advise in this complex area.
CGT is generally chargeable on UK resident persons (including those who are temporarily non resident) on gains made on the disposal of capital type assets. In practice the most common disposals will be of land and buildings, but the tax would equally apply to the sale of other assets such as paintings and works of art.
In relation to the disposal of property, it is possible to claim reliefs to minimise the amount of capital gains tax due - but it is important to note that not all of the reliefs will be available on each disposal. Some possible reliefs include:
- compulsory purchase order rollover relief
- only or main residence relief
- lettings relief
We are happy to go through various scenarios to see what the potential capital gains tax amount may be, and to provide illustrations of potential tax liability - including ways of mitigating any capital gains tax.
It is worth noting that capital gains tax rates are lower than income tax rates - for a tax payer in the basic rate band of tax, the rate is 18% and in the higher rate band of tax it is 28%. Also, an annual exemption is available which allows a certain amount of the chargeable gain to be made "free of tax". For the tax year 2014/15 the annual exemption for individuals is £11,100.
We are happy to assist other professional persons (such as solicitors, IFA's, bookkeepers, accountants) with calculations of capital gains tax and to assist any clients requiring this important service.