Capital Gains Tax (CGT)
When you dispose of an asset and make a gain (profit), you will possibly need to pay some Capital Gains Tax (CGT).
Chargeability to CGT depends on many factors such as:
So, there are a few good reasons why it is beneficial for you to take advice on any transfer or gift of your assets during lifetime or on death to review whether there are any opportunities to reach your objective and minimise tax along the way.
It’s a little bit like rocket science and it’s not as straightforward as you might think
So, there are a few reasons why it is beneficial for you to take advice on any disposal of an asset, before you progress with the transaction. Not only is it vital that you get the reporting correctly included in your tax return, there are also many ways in which your disposal can be reviewed for tax planning opportunities alongside your objectives.
The disposal of your property
There are many ways in which you might dispose of a property and a few of these transactions can include the following:
All of these examples can have a capital gains tax impact but they all have a potential for tax planning to minimise the CGT liability.
There are ways to reduce the amount of capital gains tax on the disposal of property, and this applies whether you have lived in the property or not. So, we recommend that you get in touch with Amanda sooner rather than later to review your options.
The disposal of your business
Depending on the set-up of your business and whether you are a running your business as a sole trader, a partnership or a limited company, you may be able to gain benefit from a reduced rate of CGT on your transaction.
Amanda can help you determine the amount of Capital Gains Tax you are liable for in the planning stage of disposing of your business interest – whether this is a partial disposal, or whether it may be the whole of your business.
Amanda can help you determine whether the criteria are met for the reduced rate of CGT and whether there are other tax planning opportunies that you might not have considered.
Just as importantly, you should consider the effect that this disposal will have on your Inheritance Tax position. A brief review with Amanda will give you the reassurance that you won’t be creating an unexpected tax liability in the future.
Tax planning
You do have a tax-free allowance and some assets are tax-free. There are also capital gains tax reliefs that might apply.
In chargeable situations, there are many ways to minimise the amount of Capital Gains Tax you might pay. This is all within legal and available rules within the tax legislation.
Simply, tax planning is the use of tax legislation to ascertain various methods in which a transaction can take place and comparing the tax outcome. Then, with your decision on your objectives and what you’d like to achieve and the reasons for the transaction that you are progressing, you often have a
All legal, all above board, all very moral if that is your concern. Simply just complying with the various methods within the tax legislation for calculating your tax liabilities.
The key point is to consider the wider aspects. Your situation, your objectives, your wishes. Also, the wider taxes – have you considered not only capital gains tax, but the inheritance tax effect, the income tax effect, the stamp duties……the whole tax picture.
This is where Amanda’s experience of layering tax effect and combining those taxes comes into fruition.
Capital Taxes
Capital Taxes is a term to describe the main capital taxes such as Capital Gains Tax (CGT) and Inheritance Tax (IHT). Stamp Duties are often included in the mix.
The capital taxes apply mainly to assets and the transfer of these assets during either lifetime or on death. When an individual wishes to make a disposal or a transfer of assets to another, this will always have an effect on the capital taxes. It may have an impact on your current Will. So it’s highly recommended that you take a moment to have a brief review to ascertain your tax position.
Contact Amanda for a review
It is preferable to have Amanda review the position before you proceed with the transaction and this is to consider what tax planning opportunities are available to minimise CGT, but to also consider your objectives.
Amanda offers a brief review, for no charge or commitment. This will enable her to consider whether there are any tax planning opportunities available, reliefs to gain from and other benefits to be obtained. It will also help to ascertain any issues, such as criteria to meet before you can benefit from capital gains tax reliefs, or establish any liabilities or other tax problems that you might not be aware of.
Alternatively, if your transaction has taken place, do get in touch so that Amanda can ensure you’re your disposal is reported correctly and that we have explored all reliefs and exemptions available to reduce your tax liability.
It is always important to Amanda that no fees or charges are committed to unless there is a benefit to do so.
