Capital Gains Tax

Alexander & Co provides Capital Gains Tax advice to clients who need to pay Capital Gains Tax on their profits or gains when selling their assets. 

Capital Gains Tax (CGT) is a tax on the profit – or gain – you make when selling certain assets, such as property, shares or crypto. You do not have to pay CGT if your gains for the tax year are below your yearly tax-free allowance.

Contact our specialist Capital Gains Tax advisors to discuss whether we can reduce your Capital Gains Tax liability today.

Produced by Alexander & Co, expert Chartered Accountants for capital gains tax advice who are regulated by the ICAEW

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Our expert tax accountants assist individuals and businesses with a wide range of capital gains tax issues. Some of the common scenarios we deal with for clients include:

Capital Gains made on the sale of a business, shares or property often considerably exceed the available tax-free allowances. Here, careful planning and expert advice will ensure that transactions are structured as tax-efficient as possible. This will help to minimise any Capital Gains Tax that may occur.

The personal Capital Gains Tax allowance (CGT allowance) for the 2024/25 tax year is £3,000. This has had two significant reductions in recent years. It was £12,300 up to the 2022/23 tax, reducing to £6,000 for the 2023/24 tax year.

This Capital Gains Annual Allowance is the amount of gains that an individual can make from the sale of their asset in any tax year, before being taxed. In certain circumstances, married couples can pool their allowances.

For businesses and individuals, end-of-year tax planning is vital to ensure all available tax reliefs are utilised.

Find out more about end-of-tax year planning and utilising all your allowances here.

Our team of expert capital gains tax advisors regularly advise individuals on their Capital Gains Tax liabilities. This includes those who:

As well as many other types of cases. No matter what your circumstances, our CGT Advisors are on hand to help.

CGT may be due when profit is made when all or part of a business or its assets are sold. This can include:

Our corporate team can advise businesses and shareholders on their Capital Gains Tax liability. If you’re not sure what your liabilities are, then get in touch with one of our corporate tax advisors who will be happy to help. 

These rules also apply when closing a business. The business assets must also have been disposed of within three years to qualify for relief.

If you are eligible for Business Asset Disposal Relief, you’ll pay tax at either:

“Investors’ Relief (IR) provides for a lower rate of CGT to be paid on the disposal of ordinary shares in an unlisted trading company where certain criteria are met, subject to a lifetime limit of £10 million of qualifying gains for an individual.” – HMRC (source)

Investors’ Relief lifetime limit is reduced from £10 million to £1 million (for Investors’ Relief qualifying disposals) made on or after 30 October 2024. Any shares disposed of must have been owned for at least three years up to the date of the disposal, and is typically not available if you or someone connected with you is an employee of the company. 

If you’d like to find out more about Business Asset Disposal Relief or Investors Relief and whether you qualify, please get in touch.

Business Asset Disposal Relief can also apply to the sale of shares or securities. To qualify, you must meet the following requirements: 

In circumstances where the number of shares held falls below 5% (because more shares have been issued by the company), you may still be able to claim the relief. Our team can help advise more on this when you get in touch.

There are numerous rules surrounding the disposal of shares, including whether shares are from an Enterprise Management Incentive (EMI). This can be a complex area, as both voting rights and shares in a company need to be considered, so we strongly advise seeking out expert advice to make sure all rules are abided by. 

We can also advise on other scenarios. These can include if the company stops being a trading company, and if you are selling assets lent to a business. If you are a trustee, you may also qualify as a trustee selling assets held in the trust.

Capital Gains Tax on shares is charged depending upon your personal tax band, currently at either 18% or 24% (from October 2024).

You will usually have to pay Capital Gains Tax on shares unless these are held in a pension or ISA. Capital Gains Tax may also be payable when selling investment trusts, funds, or other financial products at a profit.

When acquiring identical shares or units at different times, there is an assumption from HMRC that these are disposed of in a strict order.

Where this applies, you will need to understand which shares or units are being sold, for the tax bill to be worked out correctly.

Tax rules state that the shares or units being sold must be matched to those bought, in the same order.

Those purchased on the same day and those purchased within the subsequent 30 days are treated as being held in a pool. These are acquired at their average price.

There are other special rules that apply that we can advise on, including;

Alexander & Co provides specialist tax and accountancy advice to many landlords and property investors. This includes advising on the Capital Gains Tax aspects of selling or disposing of assets, to structuring your company tax-efficiently. We frequently advise on the benefits and pitfalls of holding buy-to-let properties in a company versus personal ownership.

As a landlord or investor, there is a wide range of issues to consider to minimise tax and increase profitability. Our expert team is on hand to guide you through the complex legislation.

As a landlord or investor, there is a wide range of issues to consider to minimise tax and increase profitability. Our expert team is on hand to guide you through the complex legislation.

Many landlords and property investors are not familiar with how to offset Capital Gains Tax effectively. This often leads to tax bills much larger than they ought to be. 

Our expert tax advisors can advise on:

Whilst the applications of the rules can be complex, we have expert knowledge in this field and can advise you accordingly.

Private Residence Relief (PRR) is currently available when you rent out a property that was once your main residence. PRR is available for the time you lived in it, plus a nine-month grace period prior to disposal.

Within this nine-month grace period before disposal, you do not need to have been living in the property.. It applies even if it was rented out during this period.

Applying for this relief correctly can significantly reduce the CGT due when disposing of a property you once lived in. But, it’s advised to seek professional support to help you ensure you are applying correctly.

If you are a resident of the UK, you pay Capital Gains Tax when you dispose of overseas properties. If you are a resident in the UK, but you are domiciled abroad, special rules can apply.

In addition to paying UK tax, you may also have to pay tax in the country where the property is located. This could effectively mean paying taxes twice. We can advise if you are able to claim relief in this situation, and anything else you may need to know about this complex area of tax.

Since October 2021, CGT needs to be reported and paid to HMRC within 60 days of a residential property sale. Failure to do so may lead to penalties and interest charges.

Find out more about the 60-day rule for residential property here.

If you are a non-resident in the UK but return within 5 years of leaving, UK tax may be due on the disposal of overseas properties.

You will pay Capital Gains on an inherited property when you sell it. This is in the same way that you would pay Capital Gains on any other property.

If the property is residential, you may be able to claim Private Residents Relief, as outlined above.

There are now two different ways in which you are required to report and pay Capital Gains Tax.

A Capital Gains Tax on UK property account will need to be created before tax can be reported and paid.

Non-UK residents must also use this to report sales/disposals from 6 April 2020 of residential UK property and land, as well as: 

Non-UK residents must report all sales/disposals of UK property, regardless of whether there is a tax liability.

If you make a loss on a chargeable asset, this can be reported to reduce your total capital gain.

When you make a loss, this amount is deducted from the Capital Gains made in that year. 

If the gain is still above the tax-free allowance, you can bring forward any losses made in previous years. You can also carry forward any remaining losses to utilise in future years

You can report a loss by including it on a self assessment tax return.

If you have never made a gain and are not required to register for self assessment, you can report this by writing to HMRC instead.

Losses do not need to be reported to HMRC straight away. These can be claimed up to four years after the end of the tax year in which the disposal occurred. (This is subject to certain exceptions.)

In certain circumstances, special rules apply to how HMRC deals with Capital Gains. These include Capital Gains on the following:

In each of these situations, Alexander & Co can advise you.

At Alexander & Co, all our tax accountants are fully certified. We provide expert advice to help minimise tax liability where possible and keep you on the right side of HMRC.

We offer an initial consultation to discuss your personal circumstances and are happy to provide you with a fee quote.

In addition to advising on Capital Gains Tax, we provide a comprehensive range of tax and accountancy services including:

To discuss how we can assist you further with Capital Gains Tax, contact us at info@alexander.co.uk or fill out the form below.

This article was written by Louis Moore, Private Client Tax Manager at Alexander & Co. Louis is a Chartered Accountant and a member of the ICAEW who provides expert advice on capital gains tax to a wide range of clients.