Capital Gains Tax

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    With our detailed understanding of tax laws, Archimedia can provide valuable Capital Gains Tax advice to protect your income.

    Capital Gains Tax issues are a hot topic, with the annual exempt amount due to decrease from £12,300 to £6,000 in 2023 and to just £3,000 in 2024. This means that thousands more people will be exposed to the tax and will be required to submit returns to HMRC.

    It also means that business owners and individuals will need to think more carefully about timing when selling capital assets. Now is the time to strategise in order to make the most of your personal and business capital gains.

    With things changing, it’s wise to speak to a Capital Gains Tax accountant to understand your liability. They can highlight valuable tax reliefs and guide you on how best to structure your affairs to protect as much of your income as possible.

    Welcome to Archimedia Accounts, Capital Gains Tax Advisors

    At Archimedia, we have been providing valuable capital gains advice for over 15 years. In our experience, we find that many clients are paying far too much tax – and that was before the planned decrease in the annual allowance.

    Tax planning has never been more crucial, and as your tax advisors, we will work hard to uncover potential tax reliefs to minimise your tax burden.

    Our owners and tax team, Barbara and Chris, have a large residential and commercial property portfolio and so have first-hand experience on how to manage Capital Gains Tax effectively. So you can be assured you are in the safe, professional hands of a family-oriented business who have your best interests at heart.

    To apply for a free initial consultation, please get in touch.

    What is Capital Gains Tax?

    CGT is a tax on the profit made when you sell or dispose of an asset that has increased in value. Common chargeable assets include shares, second homes, personal possessions worth over £6,000 and certain business assets. It does not usually apply to your main residence, with some exceptions, such as if it was used for business purposes.

    Capital Gains Tax bills are calculated by subtracting the cost of the asset from its sale price, so you only pay tax on the gain. Any other costs related to buying, selling or holding the asset can also be deducted from the gain.

    The rate of tax correlates to your tax bracket and your total taxable income in a given tax year. If you are a basic rate taxpayer, the Capital Gains Tax rate on assets (excluding residential property) is 10%, and for higher rate taxpayers, it is 20%. For residential property, it’s 18% and 28% respectively.

    Who is liable to pay Capital Gains Tax?

    Capital Gains Tax is a personal tax paid by individuals, not companies. Anyone who is in receipt of gains exceeding £6k (excluding your personal car and main residence) must declare it for tax purposes.

    Individuals get a Capital Gains Tax allowance (also known as the annual tax-free allowance or tax-free threshold), which is essentially an amount of money on which no CGT is due.

    You may have made a capital gain without realising it, as it’s not just about selling an asset. CGT is liable when you gift an asset (e.g. to your children) and transfer assets (e.g. into a limited company). Transferring assets often must be done at market value (but there are exceptions).

    There are circumstances where you don’t pay CGT, e.g. gifting assets to charity, when selling your car or main home and assets held in ISAs. Also, transferring assets to your spouse doesn’t result in a Capital Gains Tax liability.

    Assets that are subject to Capital Gains Tax are called Chargeable Assets. Chargeable business assets include land and buildings, vehicles, furniture and equipment.

    Limited Companies do not pay Capital Gains Tax. Instead, any gains are declared on their Corporation Tax return.

    Our Capital Gains Tax service

    Our approach to CGT is totally holistic, taking into account your current financial situation, your business strategy and your goals for the future. We are dedicated to gaining a deep understanding of your company and personal situation in order to save you as much tax as we can.

    Some tax advice is given on the here and now. For example, many landlords are advised to put property into a limited company to save tax. While it may indeed achieve immediate savings, in the long term, it can attract higher loan interest rates, meaning that overall, you are no better off.

    Our focus is on your overall gain. We base our tax planning not just on your present situation but on your business and life plans. That way, we can structure your tax affairs accordingly and help inform your strategic decisions to save you money now and in the future.

    Capital Gains Tax accountant for individuals

    We provide Capital Gains Tax advice and services for individuals in all kinds of scenarios, including:

    • People selling their business
    • Property investors and buy-to-let property portfolio landlords
    • Commercial property owners
    • Shareholders
    • Cryptocurrency investors
    • People transferring property and other assets into a limited company
    • Those who do not qualify for private residence relief (e.g. when a private residence has been rented out for a time or it has been used for business purposes)

    We provide our clients with general advice on their Capital Gains Tax liabilities, as well as highlighting any tax relief they may be eligible for.

    When the time comes to file a CGT return, we take care of the tax calculation and submit the paperwork to HMRC on their behalf.

    Capital Gains Tax service for businesses

    We provide CGT advice as part of our holistic tax planning service. If you are a small business owner operating as a sole trader or as a partnership, then CGT applies when you sell business assets.

    If you make the move to set up a limited company, then CGT will be due on any assets transferred to the company. Once established, your company will declare future capital gains on its annual Corporation Tax return.

    We can help you to minimise your Capital Gains liabilities and provide advice on business asset disposal relief, whereby you will only pay 10% for gains on qualifying assets.

    Capital Gains Tax Accountants for landlords

    We provide a comprehensive property tax service to landlords, which includes Capital Gains Tax. Our service is enhanced by the fact that our Head of Tax has a very large property portfolio herself. We help our landlord clients save as much tax as possible and build profitable portfolios.

    Get advice on Capital Gains Tax advice from Archimedia

    As an individual, sole trader, partnership or limited company owner, it’s important to understand your tax liability to save paying too much or being subject to penalties. Archimedia can give you valuable Capital Gains Tax advice to protect your business profit and personal income.

    As your trusted tax advisor, we take a thorough and personal approach and will go to great lengths to understand your business and personal situation to find you valuable capital gain tax reliefs.

    Along with saving you money, we can also save you the headache of calculating your Capital Gains Tax bill and will submit paperwork on your behalf as part of your self-assessment tax return.

    For a free initial consultation, please get in touch. We look forward to assisting you.

    Do I need a Capital Gains Tax accountant?

    Understanding Capital Gains Tax is essential to avoid paying too much. You also run the risk of making innocent mistakes which could result in penalties from HMRC. So it is a very wise move to work with professional Capital Gains Tax advisors like Archimedia Accounts.

    Does Capital Gains Tax apply to residential property sold in a foreign country?

    This is a very complicated area with no simple answer. But typically, if you are a resident of the UK and sell property abroad, you need to report the gain the in the UK. Double taxation laws between the UK and other countries may affect the overall tax you have to pay.

    Do I need to declare Capital Gains to HMRC?

    Yes, it is your responsibility to declare and pay Capital Gains Tax to HMRC. If the gains are yours as an individual, you must declare them on your self-assessment tax return.

    If your limited company gains from the sale of business assets, you must declare them on your Corporation Tax return.

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