When you sell an asset, the
taxman is likely to take a look to see if you’ve made a profit. Often, this is
not an issue; as anyone who has ever sold a car can attest, losing money is
easy. However, with investments, the whole idea is to make a profit, and this
is what interests the taxman.
Whenever you profit from the sale of a qualifying asset, you are considered to have made a 'capital gain'. This is calculated on the difference in value between the price at which you bought the asset (or its original value if you were given it) and the price at which you sold it, minus any expenses incurred in the transactions. Nevertheless, very few people pay Capital Gains Tax (CGT) in full, because a bit of planning can minimise your liability.
First, you have some exemptions; for example, your main residence and anything with a limited lifespan, such as your car. Moreover, you have an annual allowance (£11,300 for 2017/18) below which any gains realised are tax-free. It may also be possible to stagger the sale of your assets so that you use this allowance every tax year, or use a sale to help reset the base value of an asset against which future gains will be measured.
Finally, you can use your partner's allowances – as transfers between spouses are CGT-free – or Individual Savings Accounts, which shelter investment gains from CGT completely.
Whenever you profit from the sale of a qualifying asset, you are considered to have made a 'capital gain'. This is calculated on the difference in value between the price at which you bought the asset (or its original value if you were given it) and the price at which you sold it, minus any expenses incurred in the transactions. Nevertheless, very few people pay Capital Gains Tax (CGT) in full, because a bit of planning can minimise your liability.
First, you have some exemptions; for example, your main residence and anything with a limited lifespan, such as your car. Moreover, you have an annual allowance (£11,300 for 2017/18) below which any gains realised are tax-free. It may also be possible to stagger the sale of your assets so that you use this allowance every tax year, or use a sale to help reset the base value of an asset against which future gains will be measured.
Finally, you can use your partner's allowances – as transfers between spouses are CGT-free – or Individual Savings Accounts, which shelter investment gains from CGT completely.
For
more information please do not hesitate to contact the team at Ward Williams
Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.
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