There are various different ways you can pay CGT (Capital Gains Tax). The way you should do it depends on various factors. If you need to pay CGT on property, you need to report and pay it within 60 days of the property sale. You can either do this online or using a paper form (details of both are here). However, when it comes to paying CGT on other items, many people are needlessly doing so via their Self-Assessment Tax Return. In this article, we take a look at the easiest ways of paying CGT on things other than property.
What do I pay CGT on?
First of all, it’s useful to recap what you need to pay CGT on. Basically, if you ‘dispose’ of an item that has increased in value, you pay CGT on the gain if it exceeds your CGT tax-free allowance. To ‘dispose’ of something can mean selling, giving away or swapping an item. It can also mean getting compensation for something (normally an insurance payout) that has been lost or destroyed.
Examples of items that you pay CGT on include personal possessions (except your car), shares that aren’t held in an ISA or PEP, business assets and (sometimes) cryptoassets.
CGT tax-free allowances have become more miserly in recent years. In the tax year 2023/23, the tax-exempt allowance for individuals was £12,300. It dropped to £6,000 in 2023/24. In 2024/25 it will shrink to £3,000. As a result, a lot more people will soon become liable for CGT.
How to pay CGT
There are two main ways of paying CGT. You can either do it via your Self-Assessment Tax Return. Alternatively, you can use HMRC’s real time Capital Gains Tax Service via this page.
Although HMRC’s real time service has been live since 2017, remarkably few people use it. A recent Freedom of Information request by Quilter revealed that only 0.04% of CGT was paid via this service during 2022/23. Breaking it down further, the service recorded 2,602 disposals and collected £7,386,280 in CGT. That’s a tiny proportion of the £18.1 billion of CGT collected in total.
Can I use the real time CGT service?
Yes, anyone can use the real time CGT service. It’s particularly helpful for people who don’t need to complete a Self-Assessment Tax Return. This is because you only have to report your CGT gain.
However, it is worth noting that, if you do complete a tax return, you’ll still need to include details of the sale on it. In this case, you may prefer to simply report and settle CGT on your gain via your tax return.
Making sure you pay the right amount of CGT
While using the real time service can simplify the reporting and payment of CGT, it’s a good idea to speak to an accountant before you use it. This is because there is a variety of different CGT allowances and reliefs. A CGT expert will be able to advise you on potential ways of reducing your overall bill.
If you think you need to pay CGT on items other than property, your account manager at THP will be able to help you. If you need to pay it on property, then our fast-track CGT on property service will help you make sure you pay the right amount, on time.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.