We give a very brief overview here of a strongly regulated area, where managing and discussion are essential before any major decisions are made. We can help plan your business activities so that they are tax efficient, taking CGT into account at all stages.
Capital Gains Tax is a tax on the gain you make when you sell or ‘dispose of’ an asset.
Most assets are liable to Capital Gains Tax when you sell or dispose of them – whether they’re in the UK or overseas.
However, some assets are exempt, such as your car, personal possessions disposed of for £6,000 or less and, usually, your main home.
Many events can lead to a gain or loss, besides the obvious one of selling an asset. A gain may sometimes occur when you least expect it.
Making a gift to a child – or to other people or companies – is a ‘disposal’ for Capital Gains Tax purposes. You’ll need to work out if Capital Gains Tax is due. However, making a gift to a spouse, civil partner or charity usually won’t lead to Capital Gains Tax.
If you inherit an asset, it’s not liable to Capital Gains Tax until you sell or dispose of it. You’ll usually need to get a valuation of the asset at the date of death, to work out the capital gain or loss.
Divorce, separation or dissolving a civil partnership
When you divorce, separate or dissolve a civil partnership, you may end up transferring assets between you. These are disposals for Capital Gains Tax purposes. Whether you’re liable depends on the date of transfer and whether you’re living together at the time.