Capital Gains & Inheritance Tax

Capital Gains & Inheritance Tax advice

What is Capital Gains Tax?

Capital Gains Tax arises when you come to sell an asset at a profit or when you dispose of an asset that has increased in value over time. Gifts or transfer of assets are included in this definition.

The tax is based on the gain and not on the proceeds of the sale or the transfer value of the asset.

What are the rates of Capital Gain Tax?

The rate of tax applicable to the gain depends on the size of the gain, the overall taxable income (whether you are a basic or higher rate taxpayer) and whether the gain is from residential property or other assets.

There are various reliefs available depending on the type of the asset and the nature of the disposal.

How do I report capital-gains-tax?

Capital gains on properties sold in the UK after 6 April 2020 must  be reported within 30 days of selling the property. The following methods can be used:

• By using the Capital Gains Tax on UK property service within 30 days of selling UK property
• Straight away by using the ‘real time’ Capital Gains Tax service
• By means of your Self Assessment tax return for all other assets

What is Inheritance Tax?

Inheritance Tax is a tax due the value of property, possessions and of course money of someone who’s died.

No Inheritance Tax is due if either:
• The value of your estate is below the £325,000 threshold.
• You leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club.

The rules applicable to both Capital Gains and Inheritance Tax are complex. Please contact us for an informal discussion and see how we can help you.