Capital Gains Tax
advice

For the 2023/2024 tax year, CGT rates are 10% (18% for residential property) for your entire capital gain if your total annual income is less than £‎50,270 and 20% (28% for residential property) for your entire capital gain if your total annual income is above £‎50,270.

There are several ways to avoid paying CGT or reduce the amount you need to pay. For example, if you sell the main home you have lived in throughout and never let out (in whole or part) to anyone, you don’t need to pay CGT. Understanding CGT can be complicated, so we’re happy to do a free initial consultation to see how we can optimise your personal and business finances. To know more, contact Golding Accountancy today!

Yes, you can undoubtedly offset capital losses against your capital gains to reduce your tax bill. Here’s how it works:

• Calculate your capital gains and losses: First, identify all your capital gains and losses for the tax year. Capital gains occur when you sell an asset for more than you purchased, while losses happen when you sell for less.
• Compare short-term and long-term: Capital gains and losses are further categorised as short-term (held for less than one year) and long-term (held for one year or more).
• Offsetting within categories: First, you can offset short-term capital losses against short-term capital gains. Similarly, offset long-term capital losses against long-term capital gains.
• Unused losses: After offsetting within categories, any remaining capital losses can be used to reduce your total capital gains.
• Limit on unused losses: There’s a limit of £5,000 per tax year for unused losses to be deducted from your income tax bill.
• Carrying forward losses: If your total capital losses exceed your capital gains and the £5,000 limit, you can carry the remaining loss forward to future tax years and offset them against future capital gains.

We at Golding Accountancy can help you reduce your tax bill by offsetting losses against capital gains.

Here are some factors you can consider when planning to sell a second home:

• Principal Private Residence (PPR) Relief: If the second home has been your primary residence for part of the period of ownership, you may qualify for PPR relief, which can reduce or eliminate capital gains tax.
• Let property relief: If you have let out the second home for part of the period of ownership, you may qualify for let property relief, which can reduce capital gains tax.
  Double taxation relief: If you are a non-UK resident, you may be eligible for double taxation relief to avoid paying tax on the same income in both the UK and your country of residence.
• Selling costs: Consider the impact of selling costs (e.g., estate agent fees, legal fees) on your overall capital gain to reduce the overall amount.
• Timing: The timing of the sale can affect your capital gains tax liability, as the tax rate can vary depending on the timing of the sale and your overall income.

Still, facing difficulties in selling your second home? Our team can help you in minimising capital gains taxes.

Here are some strategies to consider in planning your investments to minimise capital gains tax:

• Utilise annual exempt amount: Take advantage of the annual exempt amount, which allows you to sell assets up to a particular value without paying capital gains tax.
• Consider gift relief: Gifting assets to family members or charities can potentially reduce your capital gains tax liability.
• Offset gains with losses: If you have other assets with capital losses, you can offset them against your gains to reduce your tax liability.
• Structured investments: Explore structured investments (e.g., Enterprise Investment Schemes, Venture Capital Trusts) that offer tax advantages.
• Consult a tax advisor: Seek professional advice from a qualified tax advisor to understand your specific situation and explore the most effective tax planning strategies.