Capital Gains Tax is a tax that applies to profits from investments, such as properties, stocks or cryptocurrency. It’s often thought of as a “death tax” because it can discourage people from investing in these types of ventures. However, capital gains are still important for people and businesses, and they can be an important part of your financial strategy.
Here are some basics about capital gains tax:
You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) property that’s not your home, for example:
- buy-to-let properties
- business premises
- land
- inherited property
There are different rules if you:
- sell your home
- live abroad
- are a company registered abroad Full infrmation you can find on Gov Wesite here www.gov.uk/tax-sell-property/work-out-your-gain
If you are selling your home there are different rules as follow: You do not have to pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:
- you have one home and you’ve lived in it as your main home for all the time you’ve owned it
- you have not let part of it out - this does not include having a lodger
- you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)
- the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
- you did not buy it just to make a gain
If all these apply you will automatically get a tax relief called Private Residence Relief and will have no tax to pay. If any of them apply, you may have some tax to pay.
If you have capital gains (or any other taxable income) from your investments, you’ll need to take advantage of tax deductions. To get the most out of your deductions, be sure to file a return and receive the correct paperwork. For more information contact us today!
