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:
Transferring ownership, or giving it away as a gift
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)
For more information on what you are required to pay CGT on, visit the gov.uk website.
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.
Convenience and care are our core strengths. By focusing our services around these principles we have developed long lasting relationships with our clients. See below for how.
We want our clients to have choice and so we use all the major accounting packages to help them work with the best solution for their business.
We want our clients to be stress free, so we meet at their premises, respond promptly to queries and accept calls out of normal working hours.
We want our clients to receive a technical service, so all our work is signed off by either a qualified accountant, chartered tax adviser or tax specialist.
Most importantly, we take interest in our clients as we love what we do. We encourage regular and open discussions to avoid focusing on standard compliance and spend more time discussing development of their businesses.
QuickBooks Ask The Expert – Rachel!
We were over the moon that Rachel was asked the host Ask The Expert, a daily series run by Intuit QuickBooks to help small business own ...