Capital gains taxes are a form of taxation the government takes regarding the gains made on various assets. Your assets (also known as the things you own) must be held for longer than 12 months, including sales of shares, selling a business or inherited properties.
Understandably, it can be difficult to calculate capital gains tax (CGT) on properties – this is why LJS Accounting Services are here to help. Over the years, we’ve helped clients with their financial issues, giving expert advice and direction. If you want to find out more about capital gains, continue reading.
Capital Gains Tax Explained
Capital gains can apply to a variety of valuables that you own. If you sell your things at a certain profit, it’s likely that you’ll owe capital gains tax. Capital gains tax is applied to an array of valuables, with cryptocurrency sales even being on the list.
Unlike when you pay income tax, capital gains aren’t automatically deducted by inland revenue – it needs to be self-reported.
HMRC can open a dispute and give out fines worth more than what your tax deduction could have been if you don’t give the correct information or fail to notify them about selling valuables and making a large sum of money from profit.
Capital gains allowance is currently £12,300 for most individuals but can differ – because capital gains allowance is set at this price, it means that you can make up to £12,300 in profits on your assets sale before the applicable capital gains rates are set.
Although the capital gains allowance is £12,300, it can double to £24,600 if you have joint ownership of a taxable asset – this can include second homes or recent property investment.
If you’re wondering whether or not assets can be shared between you or your partner, they can. Those who are in a civil partnership or legally married can exchange assets between themselves.
Rather than the date of transference, you’ll pay your capital gains allowance based on a timely basis depending on how long you’ve owned your assets. Most gains are taxed at around 10 or 20 percent – there’s no way to avoid capital gains, and if you try to, you will be caught.
Calculating Capital Gains Tax
Costs are usually figured out by using the traditional method of pen, paper and calculator, but this isn’t always ideal for those who have bigger assets that they need taxing on.
For those who struggle with manually calculating how much capital gains tax they owe, you’d benefit greatly from using the new tax calculator system on the gov.uk website.
LJS Accounting Services is here to help clients with their calculations, providing professional guidance to those who might need to know more about capital gains and how it works.
Getting your calculations wrong could cause some trouble with HMRC, and although it can easily be done, letting our expert team take control could help.
Many people reap the advantages that come with having an appointed tax adviser at LJS Accounting Services. Our team members show each client the right step to take when they’re thinking of selling their assets, guiding them through and analysing their income and outgoings to ensure there are no tax overlaps.
When the government taxes capital gains, they check necessary information that every detail you’ve provided is correct – this is why it’s best to work collaboratively with a firm like LJS Accounting Services that have adequate experience and knowledge.
Paying Capital Gains
So, how do you pay capital gains tax? Capital gains can be reported through your regular tax return, otherwise, you can use the real-time tax service provided by the government online to pay whatever it is that you owe immediately.
Finding out payment deadlines for tax payments can easily be done by searching online, but tax returns typically need to be filed by the 31st of January unless it’s been extended – checking on government official websites will indicate when you need to make tax payments and should be regularly checked by your tax adviser.
Being completely unbiased, LJS Accounting Services are one of the best firms in the UK, providing excellent services to clients up and down the country for over 10 years now.
Whether you need advice regarding your savings or want professional, financial guidance whilst you go through property-related matters such as dealing with Conveyancing issues, our team will be able to help. To talk further about your capital gains tax bill, reach out to us today.