There are still a number of sales (disposals) that you, as a UK taxpayer can make that will result in Tax Free Capital Gains in the UK.
For most of us though, these opportunities are quite limited, as legislators have had plenty of time over the past few decades to close any favourable gains tax loop-holes.
For most of us, the largest tax-free gain remains the sale of our home but even this generous relief can be compromised.
For example, if you have let your home for a period of time you should always take professional advice to see if this will trigger a Capital Gains Tax bill when you come to sell.
For the current tax year, as an individual you are entitled to make chargeable gains of up to £6,000 and still pay no Capital Gains Tax. However, this allowance is set to drop in the next fiscal year. In 2024/25 the personal allowance will fall to £3,000.
For the time being, if you own a chargeable item jointly with your spouse or civil partner, you would both be entitled to this £6,000 exemption and the £6,000 personal possession relief highlighted below. It can sometimes pay handsomely to be married!
Other sales that do not give rise to a tax bill include:-
- Sales of personal possessions as long as the proceeds do not exceed £6,000
- Selling your car, unless used in a business
- Selling anything with a limited lifespan, unless used in your business
- Disposals of investments held within an Individual Savings Account (ISA)
Additionally, any gift to your spouse or civil partner that would normally give rise to a Capital Gains Tax bill is free of any tax liability.
Even if none of the above exemptions apply in your circumstances there are a considerable number of additional reliefs you may be able to claim to reduce the impact of any Capital Gains Tax payable.
If you are likely to be making disposals it is well worth the investment of time to see how you can quite legally reduce any Capital Gains Tax bill.
BE ADVISED THOUGH – the CGT rules relating to the sale of property were changed significantly in April 2020 – tax now has to be paid much earlier than before to avoid penalties. Find out more about our Capital Gains Tax calculation service.
And a final note: remember to take professional advice BEFORE you make any disposal of property.
Seeking advice after disposal is rather like waiting for a bus after the last service has departed or attempting to close the barn door after the horse has bolted!
Capital Gains Tax help from THP
About Karen Jones
Having worked for one of the world’s largest accountancy firms, Karen Jones uses her tax knowledge and skills to help clients obtain substantial reductions to their tax liabilities.
With an expanding portfolio of tax clients, Karen enjoys the variety her work brings her and particularly likes working with new businesses and people. With a growing number of tax clients, she frequently faces a variety of challenges and relishes the experience she gains as she solves them.
Karen likes the THP ethos: “I like the way the team has a professional, but friendly and down-to-earth approach – it creates a productive atmosphere that benefits everyone.”
Karen’s specialist skills:
- Personal Taxation
- Tax Efficient Planning
- Trust Administration