Capital Gains Tax concerns the gain on disposing of a chargeable asset, rather than the total proceeds. A disposal can be a sale or a gift. Property, shares and business assets can all fall within the rules.
Individuals and trustees may pay Capital Gains Tax. Companies instead bring chargeable gains into their Corporation Tax calculation.
Work out the gain
Start with the disposal value and the acquisition cost. In some transactions, including certain gifts, market value replaces the amount actually paid.
Qualifying purchase and sale costs, and some expenditure improving the asset, may reduce the gain. Keep evidence of these amounts and distinguish improvements from ordinary running costs.
Consider losses and reliefs
Allowable capital losses can reduce taxable gains, subject to reporting and use rules. The annual exempt amount may also apply; unused exemption does not simply roll forward.
Business disposals, transfers into a company, replacement business assets and some gifts can qualify for relief. Relief may defer a gain rather than remove it permanently. Selling a home has its own conditions.
Review the CGT rates and exemption alongside the official guide to taxable disposals.
Check reporting before completion
Property disposals can have separate reporting and payment requirements. Do not assume the ordinary tax-return timetable is enough.
Bring us the purchase documents, proposed sale details, improvement costs and any relevant losses. Early review gives time to establish which reliefs and reporting obligations apply.