Capital Gains Tax

Equilibrium can provide the expert guidance you need to make sure you are not paying more Capital Gains Tax than is necessary and to ensure you are being as efficient as possible with all aspects of your tax planning.

With offices in Wilmslow and Chester, our experts are on hand to advise you on Capital Gains Tax. To find out more about how we can help, get in touch today. Either call us on 0808 156 1176 or complete our online enquiry form, which will enable us to give you a call back.

Capital Gains Tax (CGT)

Capital Gains Tax, sometimes referred to as CGT, is a tax on the profit you make when you dispose of an asset that has risen in value. In other words, it is a tax on the gain you have made when selling something that is more valuable now than previously; for instance, this could be a painting that you sold for double the amount you paid for it. CGT would only be payable on the gain you made, and not on all of the money you received.

'Disposing of an asset' can take various forms, including:

  • Selling the asset
  • Swapping it and receiving something else in return
  • Giving it to someone as a gift
  • Receiving compensation for the asset, such as if it was lost or damaged and you subsequently received an insurance payout

Importantly, you are permitted to make significant gains each year before CGT is payable, while certain gains can be tax-free altogether. With the right expert assistance, you can make sure you make the most of these allowances and do not pay any more CGT than you need to.

What Is CGT payable on?

Capital Gains Tax is typically payable when you dispose of assets such as:

  • Personal possessions worth £6,000 or more (not including your car)
  • Any property that is not your main home (however, it may be payable on your main home if it is over 5,000 sq m, if you have let it out or used it for business)
  • Business assets
  • Shares that are not in an Individual Savings Account (ISA

What is CGT not payable on?

Capital Gains Tax is not payable on all types of asset. For instance, it is unlikely that you will have to pay it on:

  • Gifts to your spouse
  • Gifts to charity
  • Lottery or betting winnings
  • ISAs
  • Premium Bonds and UK government gilts

Annual tax-free allowances

An 'Annual Exempt Amount' means that every year almost everyone who is liable to pay CGT will receive an annual tax-free allowance. This means that CGT will only be payable - after any reliefs are applied and losses deducted - if the overall gains for the tax year are higher than this amount.

The allowance is available to almost everyone who is liable to CGT, with the one amount applicable to:

  • Most UK residents
  • Executors or personal representatives of the deceased individual's estate
  • Trustees for disabled people (most other trustees get a lower Annual Exempt Amount)
 The current Annual Exempt Amount, which has been the same since April 2015, stands at:
  • £11,100
  • £5,500 for trusts
In addition to the Annual Exempt Amount, your tax bill could potentially be lowered further with the deduction of certain losses and the claiming of certain reliefs. This will be dependent on the asset involved, but it is important to seek expert help to make sure you are taking advantages of every opportunity to make sure you are minimising the tax payable.

Contact us today

Speak to us today to find out more about how we can help with any aspect of your tax planning, including Capital Gains Tax. We have supported many clients from in and around Manchester and Cheshire. To speak to our team, call us on 0808 156 1176 or complete our online enquiry form and we will give you a call back to discuss in more detail.