SJB & Co Chartered Accountants

There are certain assets that you can sell without paying CGT. They include:

  • The sale of any chargeable asset, like shares or a second home, if the overall gains in the current tax year do not
    exceed £12,300.
  • Any gains on assets you gift to your spouse, as long as you were not separated and didn’t live together during the tax year.
  • Qualifying gifts to a charity.
  • Gains from ISAs or PEPs.
  • Gains on disposal of certain UK government gilts and Premium Bonds.
  • Betting, lottery or pools winnings.
  • In most instances, the disposal of your
    main home.
  • The disposal of your own car unless you have used it for business purposes.
  • Any personal possession (jewellery, paintings, antiques and other collectibles) unless sold for more than £6,000.

CGT rates for 2022-23 are:

If you pay income tax at higher rates (40% or above) you will pay CGT at:

  • 28% on gains from sale of chargeable residential property, and
  • 20% on gains from sale of other property.

If you pay income tax at basic rates (20%) you will pay CGT at:

  • 18% on gains from sale of chargeable residential property, and
  • 10% on gains from sale of other property.

To qualify for the lower rates your taxable income plus the chargeable gain must be within the basic rate income tax band. If the gain is part under and part over this limit you will pay CGT at the lower and higher rates.

Work though the check list that follows and if any apply to your circumstances call to discuss your options.

Capital Gains Tax (CGT) Planning Check List 2022-23

  • Make sure you utilize your annual tax-free allowance of £12,300. Consider selling assets, shares for example, which can be sold within the tax-free allowance.
  • As announced in the Autumn Statement 2022, the CGT tax-free allowance is being reduced to £6,000 from April 2023 and to £3,000 from April 2024. In which case taxpayers contemplating disposals of chargeable assets may be advised to crystalise gains before 6 April 2023 to ensure the higher tax-free allowance for 2022-23 is fully utilised. Planning disposals is key during this period to obtain the best tax result.
  • If your chargeable gains are likely to exceed the £12,300 limit, are there any assets you can sell at a loss to reduce the total gains below the tax-free limit? It is no longer possible to sell and buy back shares to facilitate this planning option: the so-called “bed and breakfast” arrangement.
  • If you are contemplating the sale of your business, consider whether you can arrange your affairs such that you can claim Business Asset Disposal Relief. This will potentially allow you to make qualifying gains of up to £1m and only pay CGT at 10%.
  • As the level of your taxable income, for income tax purposes, will affect the rate of CGT you will pay, investigating ways to reduce your income tax earnings may save you CGT as well as income tax.
  • A gift of chargeable assets to your spouse does not create a CGT charge.
  • Your spouse and children also qualify for a separate tax-free allowance of £12,300. Transferring assets between family members can reduce overall CGT liabilities if considered before a sale.
  • It may be possible to claim other reliefs to reduce your potential liability to CGT. These could include rollover and hold-over gains reliefs. If you are likely to make significant capital gains during 2022-23, please contact us for advice as soon as possible so that we can explore available strategies for minimizing your CGT bill.
  • Although the sale of your main home is generally free of CGT, if you have let the property at any time during your period of ownership, or if you have made significant use of the property for business purposes, then there may be a CGT liability when you sell. If you are affected, make sure you take advice on this issue.
  • CGT payable on chargeable disposals after 5 April 2022 and before 6 April 2023 will be due for payment 31 January 2024. If you delay the disposal until after 5 April 2023, any CGT due will be payable a year later, 31 January 2025. Theoretically, you could delay a disposal by one day (from the 5 April to the 6 April 2023) and this would extend the amount of time you would have to pay the tax to by 12 months.
  • The only exception to the above payment dates is if you are selling a residential property that is not covered by Private Residence Relief. For example, a personally owned let property or a holiday home. Gains on these property disposals have to be filed with HMRC – and any CGT paid – within 60 days of the property disposal (the completion date not the exchange of contracts date).

Review all the assets you own that are currently worth less than you paid for them. Should you dispose of them and make use of the capital losses? Which would be the best tax year to register the loss? This could include a claim to treat shares as having no value (a negligible value claim).

For more information or to discuss any issues raised above please contact Simon Bell by phone on 01376 571358 or email [email protected] . This article is written in general terms and therefore cannot be relied on to cover specific situations . Applications of the principles set out will depend on particular circumstances. It is recommended that you take professional advice before acting or refraining from acting on any of the above content.


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