What is Capital Gains Tax?
Capital Gains Tax (CGT) is a payment you have to make when selling or disposing of an asset that has increased in value since you purchased it or received it as a gift. This includes property that’s not your main home or your main home if you’ve rented it out or used it for business purposes. Other items include trade assets, shares, and personal possessions worth over £6,000.
How is CGT calculated?
You only pay Tax on the profit (gain) you make from selling an asset, not the entire amount you sell it for. In simplest terms the sale price minus the cost price minus allowable tax-deductible expenses and allowances at time of purchase and sale.
For example, if you have an asset that cost £10,000 when you bought it and you later sell it for £30,000, you will have made a gain of £20,000.
Each person has a capital gains annual allowance of £3,000 (2024/25 tax year), so you’ll only settle your tax on the amount above the allowance. The amount you’ll pay will depend on the type of asset you sell (e.g., property or investments) and your income tax bracket as outlined below.
Residential Property (not your main home)
- Basic rate taxpayers: 18%
- Higher/additional rate taxpayers: 24%
Other Assets (e.g., shares, company assets, valuable possessions)
- Basic rate taxpayers: 10%
- Higher/additional rate taxpayers: 20%
To calculate Capital Gains Tax, you must work out your gain, deduct your annual tax-free allowance, and apply the correct tax rate.
Having trouble calculating Capital Gains Tax? Get in touch with Total Books for a free 15-minute CGT tax consultancy call. We offer Qualified advisors and support on your CGT liabilities. We’ll help you determine how much you owe and find smart ways to reduce the overall impact of your Capital Gains Tax bill.
When do you have to pay Capital Gains Tax?
The deadline for paying Capital Gains Tax varies depending on the type of asset and when you made the sale. For residential property sold after 27 October 2021, you’ll have 60 days to report and pay CGT, while all other assets can be reported and paid through your Self-Assessment 9 months after the April year-end. If you are late on your tax paid to HMRC, they apply a 5% penalty for taxes due after 30 days, 6 months and 12 months of non-payments after the due date.
Our Capital Gains Tax Service
At Total Books, we help individuals and businesses manage their Capital Gains Tax liability. Our job is to put your mind at ease by making sure you meet your tax obligations and save money during the process.
Below are the most common CGT reporting areas that we cover for our clients:
- Property (excluding main home sale)
- Shares and taxable investment gains
- Company assets sold for profit
- Cryptocurrency gains from disposals
- Valuable possessions over £6,000
- Trust assets subject to CGT
- Chattels with long lifespan gains
- Business Asset Disposal Relief (BADR reduction of CGT to 10%)
As your dedicated Capital Gains Tax accountant, we’ll handle it all, tailoring our service to your individual needs. Whether you’re looking to sell a second property or make smart retirement plans, our team is happy to assist. Take a look at what our CGT services can do for you.
Capital Gain Tax advice
Selling property and other valuable assets can come with challenging tax liabilities. You might end up paying far too much tax or not enough. We offer expert capital gains advice, helping you make the most of your yearly tax-free allowance and potential tax reliefs to offset Capital Gains Tax and pay only what you owe.
Our expert Capital Gains Tax advisors are fully trained and up-to-date with the latest UK tax laws and compliance regulations. Whether you’re a business owner looking to sell and retire or a property investor planning multiple sales, we’ll ensure you clearly understand your obligations. We’ll answer any questions you have and be on hand to help.
Capital Gains Tax calculations and reporting
Capital Gains Tax rules are challenging and often time-consuming, but you don’t have to do it alone. We take care of calculations and reporting so you can relax and reap the financial benefits.
Our team will:
- Accurately calculate your CGT liability, factoring in your annual exemption, taxable income, and any valuable tax reliefs.
- Ensure timely and correct reporting to HMRC, helping you avoid harsh penalties and unnecessary tax payments.
- Implement smart tax-saving strategies so you pay no more than what you owe.
- We take pride in guaranteeing our work in case of a tax investigation, and we’ve got you covered.
Business Asset Disposal
Planning to sell a business or its assets? You could be entitled to the Business Asset Disposal Relief (BADR) (previously known as Entrepreneurs’ Relief), which can help reduce your overall CGT bill in half from 20% to 10% as of 24/25 tax year.
We’ll help you determine whether you can claim Business Asset Disposal Relief and calculate your reduced tax rate, helping you keep even more of your hard-earned cash.
If you have sold a property and need to claim for this, we also explore other tax reliefs like Private Residence Relief or Lettings Relief for properties you have lived in at some point during ownership.
Why choose Total Books as your CGT accountant?
Total Books gives you access to a team of specialist Tax experts with the tools and knowledge needed for expert tax planning and timely HMRC submissions. Our job is to keep you as tax-efficient as possible and only pay what’s necessary.
Call Total Books today on 02920 026 505 or book a Free-15 Minute CGT Tax meeting for specialist Capital Gains Tax advice. We can also provide a free quote for our professional fees over this 15-minute discovery call.
Frequently asked questions about Capital Gains Tax
Does HMRC investigate capital gains?
HMRC carries out investigations into individuals' and businesses' tax affairs. These can be random or targeted if they suspect a problem. Most investigations focus on personal and corporate taxes, but they may also look at other areas, such as CGT, dividends, rental income, and the market value on the sale of shares' land and property or foreign CGT income. We even support cases for non-UK residents that may have UK CGT liabilities, such as a buy-to-let property or other common chargeable assets, such as the sale of shares or investments with a profit of more than 6k.
On numerous occasions, we have successfully helped clients out of HMRC investigations to ensure a fine and penalty rate of 0%. The process entails a clear admission with a comprehensive mitigating letter and agreement to pay all due taxes. Some of our cases have included undeclared foreign shares, UK shares, foreign assets and UK property. Our clients' relief when it's over, and HMRC closes the case is priceless.
Can you roll over Capital Gains Tax?
You may be able to delay Capital Gains Tax payments by reinvesting the profits into new company assets, meaning you won't have to pay CGT until you sell the new asset. This is known as Asset Rollover Relief.
Another common tax planning technique when transferring a sole trader or partnership business into a Limited Company is known as incorporation relief. This also allows the liability to be rolled over.
How do you pay Capital Gains Tax in the UK?
You can pay through HMRC's online services with a debit or credit card or, in some cases, on your Self-Assessment tax return. You'll need your 14-digit Capital Gains Tax reference number to get started. To help with this, HMRC has a dedicated CGT Payment page. To avoid fraud, always ensure that the HMRC bank details are verified through your banking app before making payments.
