Capital gains tax
Contents |
[edit] Overview
Capital Gains Tax (CGT) is levied on the profit that is made when something is sold, gifted, swapped or otherwise disposed of.
The following assets are liable to Capital Gains Tax:
- Property. If it is not the main home (unless it is let out, used for business or larger than 5,000 square metres).
- Shares that are not in a NISA, ISA or PEP.
- Personal possessions that are worth more than £6,000 (apart from a personal car).
- Business assets.
- Overseas assets.
[edit] Property
Property that is liable to Capital Gains Tax includes:
- Second homes.
- Any rental properties.
- Business premises.
- Land, including agricultural land.
The selling of a main home will not generally be liable to Capital Gains Tax and may be eligible for Private Residence Relief.
[edit]
The investments that are liable to Capital Gains Tax include:
[edit] Personal possessions
The majority of personal possessions that are worth more than £6,000 are liable to Capital Gains Tax, including:
- Jewellery.
- Antiques.
- Paintings.
- Coins and stamps.
- Possessions that are part of a set, such as matching vases (the threshold applies to the set as a whole).
[edit] Business assets
Numerous business assets are liable to Capital Gains Tax and typically include:
- Buildings and land.
- Fixtures and fittings.
- Shares.
- Plant and machinery.
- Goodwill.
- Registered trademarks.
[edit] Overseas assets
For residents in the UK, overseas assets are liable to Capital Gains Tax, including:
- Holiday homes.
- Shares in a foreign company.
- Land abroad purchased for development.
[edit] When Capital Gains Tax is not required
Capital Gains Tax is only required on any gains which are in excess of the tax-free allowance, which for 2013-2014 is:
- £10,900 for individuals.
- £5,450 for trustees.
It is not normally necessary to pay Capital Gains Tax on gifts between husband and wife, civil partner or to charities. In addition, Capital Gains Tax on inheritance is typically only required when an asset is sold.
The following assets are not liable:
- Personal car.
- Personal possessions that are disposed of for less than £6,000.
- Main home.
- Any tax free investment savings accounts e.g. ISAs and PEPs.
- Winnings from the lottery, betting or the pools.
- UK government gilts and Premium Bonds.
- Personal injury compensation.
- Foreign currency for personal use.
[edit] Rates for Capital Gains Tax
The rates for Capital Gains Tax for 2013-14 are:
- 18% and 28% for individuals (dependent on the total amount of taxable income).
- 28% for trustees or for personal representatives of someone who has died.
- 10% for sole traders or partnerships with gains qualifying for Business Asset Disposal Relief or BADR (formerly known as Entrepreneurs' Relief).
[edit] Reporting Capital Gains Tax
If Capital Gains Tax needs to be paid, HM Revenues and Customs (HMRC) will require notification through a tax return. This can be completed online or alternatively on paper.
[edit] Record keeping
It is necessary to maintain any records for at least one year after the Self Assessment deadline and businesses must maintain records for 5 years after the deadline.
[edit] Related articles on Designing Buildings Wiki.
- Business Asset Disposal Relief BADR.
- Business rates.
- Capital.
- Capital allowances.
- Capital gain.
- PAYE.
- Stamp duty.
- Taxes associated with selling a business.
- Tax relief.
- VAT.
[edit] External references
Featured articles and news
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
CIOB Construction Manager of the Year 2025
Just one of the winners at the CIOB Awards 2025.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.