Capital Gains Tax is a tax paid on the sale of assets which results in a capital gain.
- Capital gains tax is paid on the sale of assets such as:
- Shares,
- Housing (buy to let, second homes, except MPs who didn’t have to pay capital gains tax on second homes)
- Artwork
Capital gains Tax is not paid on:
- First £9,000 of capital gains in a year
- The place of your main residence where you live.
- Your Car.
- On income that is charged income tax.
- UK Government bonds
- Personal belongings with £6,000 or less.
Capital Gains Tax Allowances
the annual exempt (tax-free) amount – this is £9,600 for every individual in the tax year 2008-09 and £10,100 for every individual in 2009-10
Rate of Capital Gains Tax.
For 2008-09 and 2009-10 there is a single rate of Capital Gains Tax of 18 per cent for individuals, trustees and personal representatives on taxable gains.
Paying Capital Gains online
Avoiding Capital Gains Tax
- Giving gifts to other family members. E.g. you can transfer ownership of property / asset to your partner / wife. Capital gains tax will have to be paid if she sold it. But, this transfer of ownership can be useful for using up £9,000 allowance per year.
- Losses from one investment can be used to offset gains elsewhere e.g. if some shares rise and some fall; the overall tax gain is calculated.
- Taper relief. Although this was reduced in a recent budget, there are still some relief available for assets you have had for a long time.