When is capital gains tax payable?

Notwithstanding any of the comments that follow, an individual is allowed to make tax-free capital gains of £11,700 during 2018-19.

There are also a number of circumstances when a disposal does not create a taxable gain. These include:

•    The sale of personal assets worth less than £6,000.
•    Gifts to your spouse or civil partner.
•    Gifts to a charity.
•    Gains when you cash in ISAs or PEPs.
•    Disposal of certain UK government gilts and premium bonds.
•    Betting, lottery or pools winnings.
•    Any personally owned car.

If you live abroad, you will have to pay tax on gains you make on residential property in the UK even if you are non-resident for tax purposes. You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless you return to the UK within 5 years of leaving.

Even if gains are taxable there may be reliefs you can claim to reduce or defer any Capital Gains Tax that may be due. These reliefs include:

•    Entrepreneurs’ relief
•    Business asset rollover relief
•    Incorporation relief
•    Gift hold-over relief

Circumstances when these reliefs may be of use include:

•    When you sell your business
•    When you reinvest the proceeds from a chargeable disposal into a new asset
•    When you change a sole trader or partnership business into a limited liability company, and
•    If you give away a business asset.

If you are likely to dispose of, or re-organise, any assets in this way please contact us to discuss any Capital Gains Tax implications.