Key tax dates and deadlines for 2018/19
It is an inevitable reality that, for anyone earning a livin...
By Lynne Gowers on 2nd December 2016
Capital Gains Tax (CGT) is the least common tax on income, mainly because you need to come into significant financial gain to incur it and it doesn’t apply to things like main homes, cars or lottery wins.
CGT is the tax payable on any gain you make when you sell or give away any asset worth more than £6000. The main point to remember is that it is the gain you make which is taxed, not the amount you receive in total.
For example, you buy a painting for £5000 and some years later sell it for £25,000. You will be taxed on the gain of £20,000.
CGT applies to the following:
These are known as “chargeable assets”.
You only have to pay Capital Gains Tax on your total gains above an annual tax-free allowance.
If you dispose of an asset by gifting it to your spouse or civil partner, or to charity, it will not normally attract CGT.
You also don’t pay CGT on any gains you make from:
For every asset you dispose of in a particular tax year, you need to calculate how much you made when you sold or otherwise disposed of it.
If it is under the annual exemption amount, then you are off the hook for CGT.
The CGT rates were substantially reduced in the recent Autumn Statement, (except for gains on residential property which will continue to be taxed at the old rates) and apply to all other disposals which take place on or after the 6th April 2016.
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