Stephen J. Dann
~ ITPA ~
UK Tax Advisor

Capital Gains Tax


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WHAT IS CAPITAL GAINS TAX?



This tax is applied to the profit ("gain") you make when selling an asset. Capital Gains tax relief is also available for losses, and many items are exempt from this tax, including your home. Individuals are entitled to an annual exemption (£ 11,100 with effect from 6th April, 2015). Gains realised prior to 6th April, 2008 also qualify for other allowances including indexation allowance which upgrades the cost of assets in line with inflation prior to 6th April, 1998, and taper relief which is available thereafter. Capital Gains Tax Indexation Tables can be viewed here. and Capital Gains tax taper relief tables can be viewed here. I strongly advise against using these tables without a thorough understanding of the associated rules which changed considerably with effect from 6th April, 2008. The Inland Revenue do provide free Capital Gains tax advice but Officers are only trained to provide guidance in application of the legislation and are not trained to provide advice on how to minimise your liability to tax.

COMPUTATIONS


After all available exemptions and reliefs have been applied, the net gain is taxed at a flat 18% rate for basic rate taxpayers and 28% for those paying the higher trate of income tax. Indexation and Taper reliefs were abolished for all gains realised after 5th April, 2008

PROPERTY - CGT ADVICE


It is often possible to mitigate the tax on an a second home without creating any tax liability on an individual's principal private residence by electing for the second home to be treated as though it were the principal private residence. This involves a "balancing act" between the two properties and requires annual review to ensure the election is still beneficial. I can advise on this issue and provide detailed calculations involving all available reliefs.

BUSINESS ASSETS


If you are handing a business asset to someone else then it is possible to ensure that no Capital Gains tax is payable on this transfer. The rules change from time-to-time and require detailed consideration.

NON-RESIDENTS - CGT ADVICE


Non-residents and non-domicileds also have Capital Gains tax issues which require planning,especially in determining what may be bought and sold before departure, selling assets whilst abroad, and planning disposals prior to returning to the Uk. It is important to note that where an individual remains outside the Uk for less than five complete tax years, assets owned at the time of departure and sold whilst abroad will be subject to Capital Gains tax in the year of return. Any UK residentail property sold after 5th April, 2015 by a non-resident landlord will be chargeable to Capital Gains Tax, regardless of how long the landlord has been overseas. For specific advice on capital gains tax for British expats, especially non-resident landlords, please contact me via the email link below outlining your own individual situation.
Before returning to the Uk it is important to consider the value of any assets acquired whilst abroad and to consider disposing of them prior to returning (especially "bed and breakfasting") in order to avoid any future liability which may arise many years after returning.

CGT ADVICE ONLINE


If your tax affairs are straightforward, or you are overseas, then to contact a tax consultant you would have to approach an accountancy firm which is time-consuming and expensive. I provide reliable capital gains tax advice online for reasonable fees. The most recent cases are listed on my "advice via internet" page. Once all necessary information is available to me, I can usually provide a detailed and accurate response either from my forty-two years of professional experience, or from my extensive library within 24 hours. A fee, usually between £ 250 and £ 350, is required in most instances.


To engage my services, or for further information please contact me by e-mail
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