Capital Gains Tax Allowance Advice
Wakefield, West Yorkshire
Are you looking for capital gains tax allowance advice in Wakefield, West Yorkshire? Speak to us today.
If you are selling property that is neither your Shared nor your Principal Private Residence, you are expected to complete a Capital Gains Tax Review. Thereby, you get to state any Capital Gains to HM Revenue & Customs alongside the calculation of tax payable, with this usually done simultaneously as the Personal Tax Return. Do you need advice on capital gains tax allowance? We can help.
What is Capital Gains Tax?
Tax charged after selling, exchanging, giving away, or disposing of an asset at a gain or profit is known as Capital Gains Tax.
Generally, comparing the sales earnings along the original asset cost to determine the profit. It is the gain you make that is taxed, not the amount of money you receive for the asset.
When does Capital Gains Tax apply?
If you are a resident of the UK, you may be accountable to Capital Gains Tax on the sale of assets situated anywhere in the globe and not just assets found in the UK. Non-residents are expected to pay Capital Gains Tax if they have been carrying out trade in the UK.
Additionally, if you are a non-resident and this includes the overseas portion of a split year, upon disposal of a UK residential property, you are liable to Capital Gains Tax. However, main residence relief may be applicable.
Are any assets exempt from Capital Gains Tax?
Some of the most common examples of assets free from Capital Gains Tax include:
- Gifts to UK registered charities
- Private motor cars, including vintage cars
- Prizes and betting winnings
- Some Government securities
- Personal belongings where the sale value is less than £6,000
- Assets held in ISAs
- Foreign currency held for personal use.
The sale of your main home is usually free of CGT. Note carefully that this tax-free status does not extend to second homes or properties which are rented out.
Typically, there are special guidelines for Capital Gains Tax purposes that apply to persons who are UK residents but live outside the UK. When giving someone an asset as a gift, you must pay Capital Gains Tax. However, the rules are different generally and dependent on who you offer the gift to, as well as there being special reliefs for gifts of business assets. More information is available on the GOV.UK website.
Furthermore, it also applies if you transfer assets on divorce, separation, or after the dissolution of a civil partnership. In other instances, you may be treated as if you have done asset disposal. Usually, this might occur for example in case a personal possession; for example, an antique gets damaged. The capital sum received may be an insurance payout as compensation.
Do I pay Capital Gains Tax on assets I inherit?
After inheriting an asset, you do not pay Capital Gains Tax. However, if you sell, exchange the inherited asset or give it away, and its value has risen since the date of death, you will be required to pay Capital Gains Tax. If the inherited asset increases in value between the date you dispose of it and the date the deceased passed away, the resulting growth is a capital gain.