Scenario 1: You buy a property for £100k and sell it for £500k. This means a profit of £400k. At the highest CGT tax rate of 28%, your tax bill would be £112k.
Scenario 2: You buy and sell 3 houses within a 12-month period and make a £400k profit? In the eyes of HMRC, this could a property trading business and the tax rate could be as much as 47% which means a tax bill of £188k!
This is why structuring your deals is critical. If you have a question or are worried about your tax affairs, contact us today for a free non-obligation chat.
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When you sell a property you must pay tax on the selling price less the price you bought the property
Tax is paid on the profit i.e. selling price less cost of the coin(s). Buying more currency using the profit doesn't get rid of your tax bill
Buying and selling shares in quoted companies in the traditonal sense
Selling an interest or the entire business. This could in the form of a sole trader, partnership or shares in your own company
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Applies to profits of all non-residential property disposals for basic rate taxpayers. This rate may also be available to those selling a business
Applies to profits of residential property disposals for basic rate taxpayers.
Applies to profits of all non-residential property disposals for higher rate taxpayers.
Highest rate of tax. Applies to profits of residential property disposals for higher rate taxpayers. Most individuals fall into this bracket.
These losses are not very flexible/useful. They can only be carried forward to set off against future capital gains. It is not possible to set these losses off against your other income (for example your salaried income). The exception to this relates to the disposal of shares in an unquoted company. The loss in this instance can be offset against your other income by making an election. This typically applies to shares in a failed EIS/SEIS company.
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Carry out a detailed analysis of your circumstances, identify potential tax reliefs/deferrals and consider challenges from HMRC
Calculation of the tax liability and preparing the tax return making the relevant disclosures and elections
Ensure timely submission to avoid any late filing penalites
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