Tax-free gains you can make in 2019-20
There are still a number of sales (disposals) that you, as a UK taxpayer can make that will not incur a charge to the UK’s Capital Gains Tax.
For most of us these opportunities are quite limited though, 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.
Also, for the tax year 2019-20, as an individuals you are entitled to make chargeable gains of up to £12,000 and still pay no Capital Gains Tax.
If you own a chargeable item jointly with your spouse or civil partner, you would both be entitled to this £12,000 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.
And a final note: remember to take professional advice BEFORE you make any such disposal.
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!
Tax help with THP
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.