Key tax dates and deadlines for 2018/19
It is an inevitable reality that, for anyone earning a livin...
By Lynne Gowers on 12th October 2016
At Boox we are committed to making your money work for you, and this includes the best accounting advice in the business.
When you dispose of any significant asset, naturally you want to make sure you do your utmost to keep hold of as much as possible of the profits, while staying on the right side of the tax man. In this article we shine a spotlight on Capital Gains Tax.
Capital Gains Tax is the tax you pay on the gain you make when you dispose of an asset which has increased in value from when you acquired it. As well as selling, “disposing of” includes giving something away as a gift, swapping it or getting compensation for it, such as an insurance payout.
Capital Gains tax is payable on the profits you make when you dispose of the following:
You only have to pay Capital Gains Tax on your total gains above an annual tax-free allowance. You are not normally required to pay it on gifts to your spouse, civil partner or charity.
You also don’t pay it on:
From the 6th April 2015 Non Residents are now required to pay Capital Gains tax on any gains made on residential property in the UK, if they stayed in their UK property for less than 90 days in the previous tax year. In this instance the gain needs to be reported to HMRC within 30 days of the sale and any Capital Gains tax due paid within the same time period.
You don’t pay Capital Gains Tax on other UK assets unless you return to the UK within 5 years of leaving.
If someone leaves you an asset when they die, Inheritance Tax is payable by the estate of the deceased. You only pay Capital Gains Tax if you dispose of it at a later date for more than the valuation at the time of inheritance.
For every asset you have disposed of in the tax year in question (April 6th to April 5th of the following year), work out how much you made when you sold / otherwise disposed of it.
Now add together the gains. If you have made any losses on assets you have disposed of, you can deduct these to reduce your total gain, or if you have any available losses from earlier tax years these can be brought forward (indefinitely) and offset as well.
If your total taxable gains are under your Capital Gains Tax allowance, then you don’t have to pay any Capital Gains Tax.
You should report any Capital Gains Tax you need to pay in the appropriate section of your Self Assessment tax return.
Even if you have no tax to pay, you still need to complete this section of your tax return, but just select “No” for each question in the “Details of chargeable assets” page. If you have made a loss you will still need to report it to HMRC, otherwise it will not be available to carry forward to later tax years.
HMRC will calculate and tell you what you need to pay. The normal tax return and payment deadlines apply to Capital Gains Tax except for non-residents as detailed above.
Take a look at our recent blogs below.
As a business owner, your time is way too precious to spend hours dealing with HMRC or Companies Hou...
Published: 14th May 2018
“Never do tomorrow what you can do today. Procrastination is the thief of time” Charles Dicken...
Published: 11th May 2018
Congratulations! The very fact you clicked this far shows you are considering employing staff, and t...
Published: 17th April 2018
It is out with the old and in with the new when it comes to tax relief on childcare costs from April...
Published: 9th April 2018
The Boox accounting app has always been at the forefront of helping our clients understand their com...
Published: 26th March 2018
Spring has officially sprung and the start of the 2018/19 tax year is just around the corner –...
Published: 23rd March 2018
If your business is employing staff, you should already have a workplace pension in place, under the...
Published: 23rd March 2018
At this time of the year we are used to seeing the Chancellor holding aloft the red box ahead of the...
Published: 15th March 2018
A dispute has erupted between the BBC and 170 of its presenters over their tax arrangements and thei...
Published: 12th March 2018
The rush for taxpayers to file their 2016-17 self-assessment tax return is over for another year, an...
Published: 27th February 2018
If you are in the process of setting up a limited company or you are already the owner of an incorpo...
Published: 16th February 2018
If you need a little help to find the right accountancy service, don’t worry.
Get in touch with our friendly team for a FREE service consultation.
Thousands of contractors, freelancers and locums turn to Boox for help and advice with their limited company accounting. They love our personal service and app.
Specialist accounting for sole traders and the self employed, Boox combines easy online tools with expert support to take away the stress of handling your accounts.
Our combination of market-leading accounting software and expert personal advice gives you greater financial control and more time to grow your business.