Capital Gains Tax (CGT) is a tax on the profit or gain you make when you sell, give away, transfer or exchange ('dispose of') something of value - ‘an asset’. You don’t pay Capital Gains Tax on some assets, for example personal possessions worth £6,000 or less, or in most cases, your main home. The first £10,100 (2009/10) of quallifying gains is exempt from Capital Gains Tax.
Capital Gains Tax (CTG) applies to UK resident individuals, executors or administrators ('personal representatives) responsible for a deceased person's financial affairs and trustees of a settlement .
For limited companies capital gains form part of the total profits of the company on which they pay Corporation Tax.
Special Capital Gains Tax rules may apply if you don't normally live and work in the UK.
Common assets that attract Capital Gains Tax when they are sold or disposed of include some of the follow examples :
- land
- buildings, for example a second home
- personal possessions such as a painting worth more than £6,000
- shares or securities
- business assets, for example business premises or goodwill
The content and advice contained within this article is for information only. For up to date information and advice, based on your specific circumstances and to find out more information about Capital Gains Tax you can view a free online accountants knowledge database. Alternatively, net-accounting.com (which is the online accountancy website where the knowledge database is found) offers answers to many frequently asked questions ranging from business basics to Tax and VAT and is free.
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