Capital Gains Tax

Individuals
When an Individual sells or gifts an asset they may have to pay Capital Gains Tax.  The current rates of Capital Gains Tax for Individuals are 18% and 28% depending on how large the gain is and the income levels of the Individual.  Each person can realise capital gains up to an annual exempt amount each year before tax is due.

This is a useful planning tool when thinking about the timing of the disposal of assets either by selling or gifting.

Companies
A company will also have to pay Capital Gains Tax on the disposal of capital assets.  Unlike individuals, a company does not have an annual exempt amount but the rate of tax is the applicable corporation tax rate.

There are several reliefs available to individuals and / or companies to reduce the Capital Gains Tax charge.  The availability of these reliefs will depend on the circumstances of the transactions.  Some reliefs simply defer the Gain whilst some reduce it permanently.  These reliefs include:

  • Hold-over relief and rollover relief
  • Principal Private Residence relief
  • Entrepreneurs relief

Our team can advise you on the potential tax cost of disposals and assist in planning disposals to maximise the use of the annual exemption and the tax reliefs available.