Capital Gains Tax & Capital Allowances
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Capital Gains Tax (CGT) Advice & Support
Capital Gains Tax (CGT) is a tax on the profit when you sell or dispose of an asset that has increased in value. You only pay tax on the profit, not the total amount of money that you receive.
Disposing of an asset includes:
- Selling it
- Transferring ownership, or giving it away as a gift
- Swapping it
- Getting compensation for it, for example, an insurance payout if it has been lost or destroyed
What Assets Will I Pay Capital Gains Tax On?
There are multiple assets that when sold or disposed of, will require Capital Gains Tax payment:
- Most personal possessions worth £6,000 or more (not including your car)
- Property that is not your main home
- Your main home if it is being let out, used for a business, or it is large in size
- Shares (not including an ISA or PEP)
- Business assets.
For more information on what you are required to pay CGT on, visit the gov.uk website.
Capital Allowances
Capital allowances are fairly straightforward. You can claim capital allowances when purchasing assets that you use in your business, such as equipment, machinery, and some vehicles. These are also known as plant and machinery assets.
You can deduct some or all the value of these items from your profits before you pay tax. However, they are often forgotten when purchasing commercial property and can make a significant impact to your tax bill if not considered.
For commercial property sales both the buyer and seller need to agree a plant and machinery value. This allows the for the purchaser to be able to claim capital allowances. Unfortunately, this may be hidden in the small print and so is not brought to the purchaser’s attention.
How Can striveX Help?
striveX understand that not everyone has the time or knowledge to keep track of their tax requirements. Our team of capital gains tax accountants provide specialist advice and support to all clients. Get in touch to see how we can help with your Capital Gains Tax.