Taxation


Capital Gains Tax


Capital Gains Tax (CGT) arises on the disposal of an asset. In most cases this means a sale but it can also apply to a gift or compensation for loss or damage to an asset. An asset can mean shares, property, works of art or intellectual rights. In each tax year CGT is charged on the net total of your gains after deducting any allowable losses realised in the year or brought forward from earlier tax years.


Certain costs may be allowable in calculating capital gains, including:Golden egg


  • The acquisition cost or market value at 31 March 1982 (if the asset was acquired before that date).
  • The incidental costs of acquiring and disposing of the asset.
  • Expenditure on enhancing the asset’s value.
  • Indexation allowance (only available up until April 1998).
  • Taper Relief and Entrepreneurs Relief

An annual exemption is available to all taxpayers so that a certain amount of net gains are completely free of CGT. beyond this, the gains are charged at set rates of tax (see the Rates and Allowances section for details).


There are certain other reliefs and exemptions available. For instance, CGT does not apply to the sale of an individual’s only or main residence and shares held in an Individual Savings Account are also exempt. For business assets, it may be possible to defer capital gains by claiming rollover relief where the proceeds are reinvested in other business assets. Enterprise Investment Scheme and Venture Capital Trust investments also offer ways of deferring CGT but these are subject to certain rules.


If you have disposed of an asset and are unsure of the consequences, or simply wish to discuss the options available to you, get in touch with us.








 

 


In the News

Budget 2012

The Chancellor has confirmed that this year's Budget statement will be made on Wednesday 21 March.

VAT Online Filing

This becomes compulsory from 1 April 2012 and payment of VAT must be made by electronic means. Cheques will no longer be accepted.

Compulsory Pensions

In 2012 automatic enrolment into a pension scheme is due to come into force. On average, it will cost small businesses an extra £2,550 per year.

Budget 2011

You can still access our in-house 2011 Budget guide and commentary by clicking the link here. We welcome any feedback or questions you may have to enable us to improve our services.

Features

Deadline Diary

The next important diary date is 31 January when 2011 Tax Returns have to be submitted to HMRC to avoid an automatic £100 late filing penalty. Payments of tax are also required by this date. Do get in touch if you need any help.

Rates & Allowances

Click here to download a PDF file with the latest figures.