Capital Gains Tax (CGT) is payable on any financial gains you make as a result of the sale of an item or investment such as shares, property, art or jewellery. However CGT does not apply to financial gains as a result of inheritance, and tax on these windfalls fall under Inheritance Tax (IHT).
The Capital Gains Tax (CGT) that is due on the profits from a sale will be determined by a number of factors, including your level of income, personal allowances and any tax efficient wrappers you may have in place such as ISAs and family trusts. All this means that getting expert advice is vital to ensure that you are not paying too much.
There are, however, a number of tax reliefs which may be available to help you reduce your tax liability, such as Entrepreneur’s Relief or Rollover Relief which are available to individuals; getting the right professional advice can help you take advantage of the tax efficient schemes which may be available to you.
Private individuals, sole traders, partners in partnerships are required to pay Capital Gains Tax, companies however fall under the separate category of Corporation Tax.
CGT for businesses
For business people registered as a sole trader or partnership there are various ways in which your adviser can help to mitigate your exposure to CGT. Entrepreneur's Relief for example is an effective way of minimising your tax exposure up to as little as 10% of the profits of any sale. However, benefiting from these reliefs is dependent on fulfilling strict criteria which can only be met through careful planning. Enterprise Investment Schemes (EIS) are another option which can often be a solution to reducing tax liabilities and minimising CGT as profits are reinvested into a fund, but again, taking advantage of EIS can only happen where careful forward planning has occurred and specific time criteria have been met.
Our qualified and professional team of tax advisers are on hand to help you navigate the tax system, giving you the peace of mind in knowing that you are paying the right amount of tax. All of our advisory teams work closely with each other, which means that we can take a joined-up approach to your tax affairs both in terms of your business or private wealth.