Guide to Avoiding Capital Gains Tax

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

Online forms

Avoiding Capital Gains Tax

  1. 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.
  2. 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.
  3. 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.
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