Tax free gains

 There are a number of assets that you can sell at a profit without paying capital gains tax (CGT) on the sale. They include:

  • Any car that is owned personally, and not by a business.

  • Personal possessions worth up to £6,000 each. For example jewellery, paintings or antiques.

  • Stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs.

  • UK Government or 'gilt-edged' securities, for example, National Savings Certificates, Premium Bonds and loan stock issued by the Treasury.

  • Betting, lottery or pools winnings.

  • Personal injury compensation, and

  • Foreign currency you bought for your own or your family's personal use outside the UK.

 

Of course, if you make a loss selling any of the above, the losses would not be available to set off against other gains for CGT purposes.

There are also certain reliefs that you can claim to mitigate or defer CGT. These include:

  • Business Asset Roll-Over Relief – This applies when you dispose of some types of business asset, which you intend to replace. You may be able to 'roll-over' or postpone the payment of any CGT that would normally be due.

  • Incorporation Relief – If you incorporate your business, that is, you transfer your business to a company CGT may not be due at that time.

  • Gifts Hold-Over Relief – You may be able to get this relief if you give away a business asset. You can postpone all or part of your gain until the asset is sold or disposed of by the person you gave it to.

  • Disincorporation Relief – When a business is transferred from a limited company to the shareholders, it is known as disincorporation. The shareholders continue the business in an unincorporated form – as a partnership or sole trader.

If you are thinking of selling assets that you are concerned may result in a tax charge please contact us for an opinion. Often there are planning opportunities that can be legitimately employed. The key is to plan the transaction carefully to maximise use of reliefs available.

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