Capital Gains Tax

When you dispose of an asset, there is potentially tax to pay on any gain made from this disposal. This most commonly arises in the sale of:

  • Shares, where those shares are not held in an ISA or PEP
  • Property, which is not your Principal Private Residence
  • Personal possessions which are valued at over £6,000, except your car
  • Business assets

Capital Gains Tax is payable on disposals of assets in excess of your annual allowance (currently £12,000). The disposals are required to be detailed and submitted to HMRC with the Personal Income Tax Return Form. Capital Gains Tax is due for payment by 31st January following the tax year of the liability.

On the other hand, losses made on the disposal of any assets can either be set against gains made in the same year or carried forward to future gains. The losses also require to be detailed as above.

In addition, HMRC have recently introduced legislation with regard to the disposal of any property which is not your principal private residence. If a gain has been made, and is in excess of the annual Capital Gains Tax Allowance, you are required to report this to HMRC within 30 days of the date of completion of the settlement and make payment of any tax due. The payment will be taken into account at the end of the relevant tax year for your normal annual return.

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