Capital Gains Tax Accountancy Services

6 Wands offers Capital Gains Tax accountancy services to aid business owners in navigating this often complex and confusing part of taxation legislation. Failure to pay the correct amount of Capital Gains Tax within the correct period will incur penalties, so it’s important to get it right.

Capital Gains Tax (CGT) must be paid whether you’re an individual or only own a small business. At Six Wands we specialise in offering our accountancy knowledge and expertise to our clients, no matter whether you’re an SME, sole-trader, or self-employed.

What Is Capital Gains Tax (CGT)?

Capital Gains Tax is paid to HMRC and is due on all assets and possessions worth more than £6,000 when sold or ‘disposed’ of. This tax is due only on the profit you gained from this sale, not the total sale amount.

However, the ‘disposal’ of an asset does not just apply when an item is sold, it also includes gifts, transfer of ownership, trades, or compensation claims. Therefore, Capital Gains Tax would also apply in each of these circumstances.

What Do You Pay CGT On?

Assets that Capital Gains Tax applies to property and possessions that exceed £6,000 in value, or more generally ‘chargeable assets.’ Chargeable assets may also include:

  • Personal possessions.
  • Shares.
  • Business assets.
  • Any residential property that isn’t your main home, including overseas properties, second homes, holiday homes, or buy-to-let properties.
  • Under certain circumstances, your home - if you have let it out, it’s used for business, or is larger than 5,000 m2.

How Much Must You Pay in CGT?

The current rate you will pay on CGT will depend on your circumstances, specifically the income tax band you fall into.

If you’re in the basic tax band calculating your CGT can be complex, and we would recommend consulting a specialist like those at 6 Wands to ensure that any payments are correct and to avoid any potential penalties for incorrect payments.

In additional or higher rate tax bands the amount you’ll pay in Capital Gains Tax will reflect the incremental increase above the basic tax band.

When to Pay CGT?

For most possessions, you must report your gain by 31st December in the tax year following when you made the gain, or you can report it by the deadline in your self-assessment tax return for the following year. You can also report and pay your tax immediately if you know what you owe.

However, for residential properties that you don’t live in sold after April 2020, any capital gain must be reported within 30 days of sale to the HMRC.

6 Wands: Specialist CGT Accountants

Often, individuals and small businesses can end up paying more in CGT than they necessarily need to. Especially as many are unaware of reliefs that may help reduce the amount due to be paid. For further information on CGT and support through the calculation and payment process contact 6 Wands today. We are AAT Licensed accountants that are qualified in Capital Gains Tax.