Capital Gains Tax (CGT) is a tax applied on the profit you receive when disposing of an asset.
You are not taxed on the amount of money you receive, but on the gain you make.
For example, if you bought something for £10,000 and sold it for £20,000, you’ve made a gain of £10,000, and that is what will be taxed.
What do you pay CGT on?
CGT applies when you dispose of ‘chargeable assets’, including:
If you jointly own the asset with somebody else, you must pay CGT on your share of the gain.
If you are gifting the asset to someone, you may still need to pay CGT, but this is not usually the case if you are gifting to your spouse, civil partner, or a charity.
You do not pay CGT on certain assets, including any gains you make from:
To determine your gains, you need to collect records which you must keep for at least a year following the Self-Assessment deadline.
If you filed your tax return late, or HM Revenue and Customs (HMRC) have launched a check into your return, you’ll need to keep them for longer.
For businesses, records must be kept for five years after the deadline.
How much will you pay?
The rate you pay will differ based on the amount of your total taxable income and the type of asset you are disposing of.
Across the 2020/2021 tax year, the basic rate on residential property gains was 18 per cent and 10 per cent on all other assets.
The additional rate of CGT was 28 per cent on residential property and 20 per cent on all other assets.
Need help on CGT and other tax-related matters? Contact us today.
“Richard Anthony case study – Terry Lewis – Jaques Samuel Pianos Widely considered to be London’s leading piano retailer, Jaques Samuel Pianos has grown considerably from its humble beginnings in the front room of Mr Samuel’s home in Notting Hill. They are now internationally recognised and have provided pianos for high-profile clients like Queen and […]”
Terry Lewis – Jaques Samuel Pianos
“Richard Anthony: ‘a super-star firm’ MT Finance is a property finance lender, specialising in bridging loans and auction finance. They assist numerous property professionals, business owners, and individuals with their finance requirements and specialise in short-term asset-based lending. Founder and Director, Tomer Aboody, knew that as an asset-based lender, the business would require an expert […]”
Tomer Aboody – MT Finance
“A family fairground success story The Botton family have been running a traditional fairground, arcade and amusement park in the heart of Skegness since taking over the Pleasure Beach in 1965. Jim, the Director of the company, took over from his father and now heads day-to-day activities and administration. He said: “The Pleasure Beach is […]”
Jim Botton – Pleasure Beach (Skegness)