Capital Gains Tax Planning

In general terms a capital gain will arises when a person (or trustee) disposes of a capital asset at a profit. The gain is usually calculated on the difference between the original cost of the asset and the sale price, although market value will should be used in situations where the transaction was not at arms length e.g. gifts to children.

A chargeable assets could include anything from a single asset, such as a property or chattel, to shares in a large corporation.

Although capital gains tax has been widely viewed as tax payable by UK-resident individuals, we have seen some significant changes in recent years, most notably, changes to the disposal of UK residential property by non-UK residents (including trustees), whereby a non-resident Capital Gains Tax return is due within 30 days from the end of the date of conveyance.

There are various allowances and relief’s which are available on the sale of assets, such as the Principle Private Residence relief, which is available on the sale of a property which has been occupied as the individuals only or main residence. There are conditions that apply and the relief can in some cases be restricted.

Entrepreneurs Relief is available on the sale of qualifying business assets, including shares in a qualifying company, subject to meeting the qualifying conditions.

Gift Relief is available to a settlor, on the transfer of certain assets to a trust, subject to conditions.

Capital Gains Tax Planning Service:

  • Advising on the tax consequences of selling or transferring your asset, including the rates of tax that apply, and the availability of any reliefs or exemptions.
  • Identifying and maximising capital expenditure, which will reduce the tax payable on your gain.
  • Preparing estimated calculations of the capital gains tax due, so you can plan ahead and get your finances in order.
  • Preparing and submitting your annual tax return to HM Revenue and Customs to report the capital gain.
  • You should always seek advice in advance of a transaction occurring. This will give you enough time to implement the necessary changes needed for effective tax planning.
  • There is often very little that can be done once a transaction has already taken place therefore, if you a considering selling an asset and would like to discuss the tax implications then don’t delay!

To find out more please get in touch for your free consultation.