There are still a number of sales (disposals) that a UK taxpayer can make that will not incur a charge to the UK’s Capital Gains Tax. For most of us they are limited in extent, after all legislators have had plenty of time to close any favourable loop-holes.
For most of us, the major tax-free gain remains the sale of our home, but even this generous relief can be compromised. For example, readers who have let their home for a period should take professional advice to see if this will trigger a CGT liability when they sell.
Also, for the tax year 2019-20, individuals are entitled to make chargeable gains of up to £12,000 and pay no CGT.
If you jointly own a chargeable item, you would both be entitled to this £12,000 exemption and the £6,000 personal possession relief highlighted below.
Other tax-free gains include:
- personal possessions as long as the proceeds do not exceed £6,000
- your car, unless used in a business
- anything with a limited lifespan, unless used in your business
Additionally, any gift to your spouse or civil partner, that would usually be subject to a CGT charge, is free of any CGT liability.
Even if none of the above exemptions apply in your circumstances there are a considerable number of additional reliefs you may be able to claim to reduce the impact of any CGT payable. If you are likely to be making disposals it is well worth the investment to see how you can quite legally reduce any impact of CGT.
A final note: take professional advice BEFORE you make the disposal. Seeking advice after disposal is rather like waiting for a bus after the last service has departed.
Source: New feed