Capital Gains Tax
Attain Knowledge, Steer Clear of Taxing Situations
As the moniker suggests, Capital Gains Tax (CGT) is levied on the profit derived from a capital asset. This encompasses various transactions, including the sale of investments or property, and extends to gifts.
What Should I Keep in Mind?
Occurrences leading to a capital gain tend to be sporadic and easily overlooked. However, most gains must be reported on your self-assessment tax return. If you're disposing of residential property in the UK, you must report and settle any CGT liabilities within 60 days of completion. It's crucial to assess the CGT implications before selling, as late submissions can result in penalties and interest charges. When you gift a capital asset, you're treated as making a disposal at its market value. This means you could still incur a tax liability, even if you receive no monetary compensation for the asset. Even if you incur a loss on the disposal of an asset, reporting the transaction can be beneficial. It allows you to offset the loss against future gains.
Are There Instances When CGT Isn't Applicable?
Indeed, there are several occasions and scenarios exempt from CGT. Some assets are entirely excluded, and transfers between spouses (or civil partners) cohabiting are typically tax-free. Gifts to charitable organizations also fall into this category. Additionally, special reliefs apply to business assets, specific trust arrangements, and a range of tax advantages for designated 'tax-favored' investments like the Enterprise Investment Scheme.
How Can Nexus Business Consultancy Assist?
Calculating your capital gain can be intricate. We can alleviate the concern of potential miscalculations and ensure compliance with pertinent reporting requirements, preventing penalties and interest charges. Informing us of planned transactions in a timely manner empowers you to maintain control, and sometimes, straightforward measures can be implemented to minimize taxable amounts. Our expertise ensures you pay only the requisite tax and capitalize on all entitled reliefs.