Capital Gains Tax / 19 posts found
Capital Gains Tax liabilities
Capital Gains Tax (CGT) is defined by the Government as: "Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive." So, you will pay CGT on an item such as a painting, but not on your house, provided that it is your primary residence. You are liable to pay CGT at certain times of the year. If you personally disposed of an asset that is subject to a CGT charge, at any time during [...]
October 2017 Q&A
Q. My mother gave my daughter £5,000 on 1 May 2013. She had not made any other gifts in previous years. Unfortunately my mother passed away on 1 September 2017. How much of the gift she gave to her granddaughter is chargeable to inheritance tax? A. Since your mother did not make any other gifts, the gift she made to your daughter will be covered by inheritance tax annual exemptions - £3,000 for 2013/14 plus her unused exemption brought forward from 2012/13 (£3,000 available). Q. I am a self-employed builder. I carried out a job for a customer and invoiced him for £750. [...]
CGT annual exemption: use it or lose it!
Capital gains tax (CGT) is normally paid when an item is either sold or given away. It is usually paid on profits made by selling various types of assets including properties (but generally not a main residence), stocks and shares, paintings, and other works of art, but it may also be payable in certain circumstances when a gift is made. The most common method for minimising a liability to capital gains tax is to ensure that the annual exemption is fully utilised wherever possible. Whilst this is relatively straight-forward where only capital gains are in question, the computation can be [...]
February 2017 Q&A
Q. Due to unforeseen circumstances I have recently had to sell my house and down-size to a smaller property. I sold the house for £20,000 less than I paid for it. Can I offset this loss against income from my business and reduce my income tax liability for this year? A. Unfortunately the tax law does not permit you to do this. I am assuming that you are not trading in properties and the house was either your main residence or an investment asset. Losses on the sale of a principal private residence are generally not allowable losses for tax [...]
The Autumn Statement 2016
This is aimed at those who didn't receive our client newsletter - that is still available at http://eepurl.com/cqcb0b. If you do read them both, let me know which version you prefer:-) Summary Chancellor Philip Hammond has delivered his Autumn Statement 2016, which is the first major review of government finances since the EU Referendum, and Mr Hammond's first major statement since taking responsibility for the work of the Treasury in July 2016. As previously speculated, this will be Mr Hammond's only Autumn Statement as it was confirmed that the government is to move to a single major fiscal event each [...]
December 2016 Q&A
Q. My wife doesn't work. Can she transfer her unused personal tax allowance to me? A. Since April 2015, it has been possible for a spouse or civil partner who is not liable to income tax or not liable above the basic rate for a tax year, to transfer part of their personal allowance to their spouse or civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate. The transferor's personal allowance will be reduced by the same amount. For 2015/16 the amount that could be transferred was £1,060, rising to [...]
Self-assessment and disclosure
Finance Act 2016, which became law on 15 September 2016, contains provisions designed to help clarify the time allowed for making a self-assessment. The time limit is four years from the end of the tax year to which the self-assessment relates. This is the same time limit as for assessments by HMRC. The provisions will have effect on and after 5 April 2017, although there are transitional arrangements for years previous to this, as follows: for tax years prior to 2012/13, taxpayers have until 5 April 2017 to submit a self- assessment; for 2013/14, the deadline is 5 April 2018; [...]
Restriction of tax relief on finance costs for individual landlords
New provisions will take affect from April 2017, which will see tax relief for finance costs on residential properties being gradually restricted over a period of three years, until, by 2020/21, all financing costs incurred by a landlord will be restricted to the basic rate of income tax. Such finance costs include mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan. Landlords will no longer be able to deduct all of their finance costs from their property income [...]
Spotlight on Tax Avoidance Schemes
HMRC have published Spotlight 31: change of date for withdrawal of transitional relief on investment growth, which covers the extension of the date of withdrawal of transitional relief currently available under FA 2011, Sch. 2, para. 59 from 30 November 2016 to 31 March 2017. The withdrawal of the relief was announced at the 2016 Budget, as part of the package of changes to tackle the use of disguised remuneration avoidance schemes (such as Employee Benefit Trusts (EBTs) and contractor loans) and ensure that those who have used these schemes pay the correct amount of tax and National Insurance contributions. [...]
July 2016 Q&A
Q1. My mother died last year and left my brother and me a commercial business unit. Probate is nearly complete now. If we sell the property in the future, what are the capital gains tax implications on the sale? A: I presume that you and your brother are inheriting equal shares in the property. Your acquisition value, for future capital gains tax computation purposes, is the market value at the date of death - known as the 'probate value'. Capital gains tax will be calculated under the normal rules on any increase in value from that date. Q2. I have [...]