Capital Gains Tax

Yet another tax!

A Guide to Capital Gains Tax

If you invest your money in property, shares, a business or virtually anything other than a home to live in you will be taxed on any increase in value from the time you acquired it to the time you dispose of it. By dispose we mean sell it or even give it away

You do have a tax free allowance which for an individual is ,at present £11,100. That is a one off allowance each year and can not be carried forward. If you don't use it , you lose it.

So a rough example for illustration purposes only.

If you bought a buy to let investment 10 years ago for £200,000 and sell it now for £300,00 ( or give it away to a son or daughter) you will have made a profit of close on to £100,000. You can deduct the cost of buying it and of selling it and a possibly a few other minor deductions but essentially it is likely to be close to the £100,000

Take away your tax free allowance of £11,100 Or twice that if two of you own it jointly. Profit about £90,000 or £80,000

That's probably going to be taxed at 28%

The exact sum of tax payable will depend on your personal circumstances and the property's precise history and that is something you may want to discus with an accountant in due course

For a more detailed explanation from HMRC itself please Click Here