Certified Capital Gains Tax Accountant in London

capital gains tax accountant london

Capital gains tax is the tax paid when you sell an asset

Example: You buy a property for £100k and sell it for £500k. This means a profit of £400k. Taking the highest CGT tax rate of 28%, your tax bill would be £112k.

What if 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!

Simple right? The definitions of trade and capital are often disputed in the courts and over the years there has been significant case law as a result.

Click here to get an instant quote

What are assets for the purposes of capital gains tax

Property

When you sell a property you must pay tax on the selling price less the price you bought the property

Cryptocurrency

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

Quoted shares

Buying and selling shares in quoted companies in the traditonal sense

A trade/business

Selling an interest or the entire business. This could in the form of a sole trader, partnership or shares in your own company

What are the different rates of capital gains tax

10%

Applies to profits of all non-residential property disposals for basic rate taxpayers. This rate may also be available to those selling a business

18%

Applies to profits of residential property disposals for basic rate taxpayers.

20%

Applies to profits of all non-residential property disposals for higher rate taxpayers.

28%

Highest rate of tax. Applies to profits of residential property disposals for higher rate taxpayers. Most individuals fall into this bracket.

Capital Gains Tax Accountant

How to reduce capital gains tax

  • Annual exemption - this is an annual allowance (currently £10k) each year that every person gets
  • Spousal transfer - if you transfer an asset to your spouse, there is no tax to pay
  • Chattel exemptions - this applies if you dispose of tangible movable property and the disposal does not exceed £6k
  • Share exemption - selling shares in an enterprise investment scheme or seed enterprise investment scheme business

Capital Gains Tax Accountant

Capital gains tax losses

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.

How we can help

Identify tax reliefs

Carry out a detailed analysis of your circumstances, identify potential tax reliefs/deferrals and consider challenges from HMRC

Calculate the tax

Calculation of the tax liability and preparing the tax return making the relevant disclosures and elections

Submission of tax return

Ensure timely submission to avoid any late filing penalites