Capital Gains Tax Advice

Capital Gains Tax may apply when you dispose of an asset for more than it originally cost you. A disposal can include selling an asset, giving it away or transferring it in certain circumstances.

Assets that can potentially give rise to a taxable gain include property, shares and investments, business assets and other chargeable assets.

Not every disposal results in CGT. The tax position depends on factors such as the type of asset, the amount of the gain, your circumstances and any available reliefs or exemptions.

Transfers between spouses or civil partners can receive special treatment, while assets transferred on death are generally dealt with under different inheritance tax rules.

It is important to establish the tax position before completing a disposal, particularly where a significant gain is expected.

Care Accountancy can review your circumstances and help establish whether Capital Gains Tax may apply.

Your capital gain is generally calculated by comparing the amount you receive when disposing of an asset with its allowable cost.

Depending on the circumstances, allowable costs can include the original purchase price, certain acquisition costs, qualifying improvement expenditure and some costs of disposing of the asset.

The calculation can become more complicated where an asset has been owned for a long period, used for different purposes or transferred between connected persons.

Capital losses from other disposals may also affect the amount of gain on which CGT is ultimately payable.

Accurate records of purchase costs, improvement expenditure and disposal costs are therefore important when calculating your taxable gain.

Care Accountancy can help calculate your gain and identify relevant costs and reliefs before your CGT position is reported to HMRC.

The deadline for reporting a capital gain depends on the type of asset disposed of and your individual circumstances.

Special rules apply when disposing of UK residential property. Where a UK residential property disposal gives rise to CGT, the gain generally needs to be reported and the tax paid within 60 days of completion.

Other taxable gains may need to be reported through Self Assessment, depending on your circumstances and whether HMRC requires you to submit a tax return.

It is important not to assume that all capital gains have the same reporting deadline.

Missing a reporting or payment deadline can result in penalties and interest, depending on the circumstances.

Care Accountancy can help establish which reporting requirements apply to your disposal and when action is required.

The amount of Capital Gains Tax you pay depends on the size of your taxable gain, your taxable income and the type of gain involved.

For the 2026/27 tax year, the Annual Exempt Amount for individuals is £3,000. Gains covered by this allowance are generally not subject to CGT.

For most taxable gains, the CGT rates are 18% on the part of the gain falling within your available basic-rate tax band and 24% on the part falling within the higher and additional rate bands.

Different rules and rates can apply in particular situations, including certain carried interest and business-related disposals.

Your available losses, reliefs and exemptions can also reduce the amount of gain that is ultimately taxable.

Care Accountancy can calculate your potential CGT liability and explain how the relevant rates and allowances may apply.

Depending on the asset and your circumstances, various Capital Gains Tax reliefs and exemptions may be available.

Examples include Private Residence Relief for qualifying disposals of a main residence and Business Asset Disposal Relief where the relevant conditions are met.

Other reliefs can apply in specific circumstances, including Business Asset Rollover Relief, Incorporation Relief and Gift Hold-Over Relief.

The availability of a relief depends on detailed conditions, including how an asset has been owned or used and the nature of the disposal.

Some reliefs can significantly reduce the tax payable, while others may defer the gain rather than remove the tax liability altogether.

Professional advice can help establish whether a particular relief applies before you dispose of an asset.

If you dispose of an asset for less than its allowable cost, you may make a capital loss rather than a capital gain.

Allowable capital losses can generally be used against capital gains, subject to the relevant HMRC rules.

Losses may sometimes be carried forward and used against gains in future tax years where the conditions are met.

You should keep accurate records of disposals that result in losses, as failing to claim or report a loss within the applicable rules can affect your ability to use it later.

The interaction between capital losses, the Annual Exempt Amount and available reliefs can affect the final amount of CGT payable.

Care Accountancy can review your previous and current disposals to help determine how available losses may affect your overall CGT position.