Still time to utilise annual tax-free allowance

utilise annual tax-free allowance | Accountants in Crathie | Accountants in Tullich | Accountants in Offwell | Accountants in Ashprington | Accountants in Rackenford | Accountants in Kern borough | Accountants in Littleham North Devon | Accountants in Newton St Petrock | Accountants in Cann | Accountants in Cattistock | Accountants in Sturminster Marshall | Accountants in Glasgow Golf Club

Still time to utilise annual tax-free allowance

Topic: utilising annual tax-free allowance

We would like to remind our readers that there is still time to use the annual exemption for CGT Capital Gains Tax. In the current 2019-20 tax year, this amounts to £12,000. This means that there is no CGT to pay on the first £12,000 of gains where you dispose of chargeable assets, such as property or stocks and shares.

If you are a married couple or civil partnership, you should ensure that each of party utilises their full annual exempt amount wherever possible. Any unused part of the annual exempt amount cannot be carried forward and is forfeited if unused in the current tax year.

CGT is usually charged at a simple flat rate of 20%. If you only pay basic rate tax and make a small capital gain, they may be subject to a reduced rate of CGT of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT. A higher rate of CGT (8% supplement) applies to gains on the disposal of chargeable residential property.

Planning notes

  1. If you have sold or are planning to sell any assets in the current tax year, it is important to ensure that you take full advantage of the annual capital gains tax (CGT) exemption and arrange your affairs accordingly. For example, capital losses are deducted from gains before net gains are calculated. Crystallising a loss that will waste the annual exemption should therefore be avoided.
  2. Any CGT due on chargeable gains that relate to the disposal of residential property on or after 6 April 2020 will be due within 30 days of completion. If you are considering selling a property soon, it would be beneficial to do so before the end of the current tax year. In this way you will benefit from an extended time period to pay any CGT due. This is because the payment date for any CGT due on residential property sales made before 6 April 2020 will be 31 January 2021.
  3. If you sell a residential property that has always been your family home – no periods of sub-letting – the new 30 day reporting and payment window will not apply as the gain will be covered by the Private Residence Relief.

For more information on utilising annual tax-free allowance , Book a Free Consultation

Our Offices

Makesworth Accountants in Harrow

Unit-101, First Floor,
Cervantes House, 5-9 Headstone Road,,
Harrow, London HA1 1PD
United Kingdom (UK)
Phone: 020 7993 8850
Fax: 020 7183 5320
Email: info@makesworth.co.uk

Makesworth Accountants in Central London

63/66 Hatton Garden
Fifth Floor Suite 23,
Central London, London EC1N 8LE
United Kingdom (UK)
Phone: 020 7993 8850
Fax: 020 7183 5320
Email: info@makesworth.co.uk

Makesworth Accountants in Ilford

Balfour Business Centre, Suite B15
390-392 High Road,
Ilford, London IG1 1BF
United Kingdom (UK)
Phone: 020 7993 8850
Fax: 020 7183 5320
Email: info@makesworth.co.uk

Proud to be featured in

Happy with our services? Please leave us a Google Review. Click here

Google Review Stars