When is Capital Gains Tax Payable?
Notwithstanding any of the comments that follow, an individual is allowed to make tax-free capital gains of £11,700 during 2018-19.
There are also a number of circumstances when a disposal does not create a taxable gain. These include:
- The sale of personal assets worth less than £6,000.
- Gifts to your spouse or civil partner.
- Gifts to a charity.
- Gains when you cash in ISAs or PEPs.
- Disposal of certain UK government gilts and premium bonds.
- Betting, lottery or pools winnings.
- Any personally owned car.
If you live abroad, you will have to pay tax on gains you make on residential property in the UK even if you are non-resident for tax purposes. You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless you return to the UK within 5 years of leaving.
Even if gains are taxable there may be reliefs you can claim to reduce or defer any Capital Gains Tax that may be due. These reliefs include:
- Entrepreneurs’ relief
- Business asset rollover relief
- Incorporation relief
- Gift hold-over relief
Circumstances when these reliefs may be of use include:
- When you sell your business
- When you reinvest the proceeds from a chargeable disposal into a new asset
- When you change a sole trader or partnership business into a limited liability company, and
- If you give away a business asset.
If you are likely to dispose of, or re-organise, any assets in this way please contact us to discuss any Capital Gains Tax implications.