CAPITAL GAINS TAX
What is Capital Gains Tax?
Capital Gains Tax is a tax charged on net gains made when you sell or dispose of most assets, this can also include gifting and swapping assets. Net gains under £6,000 are not subject to capital gains tax. It is important to make the most of the £6,000 allowance as it won’t carry over into the following tax year.
Typically, Capital Gains Tax is charged at 10% for basic-rate taxpayers and 20% for higher and additional-rate taxpayers, however this increases to 18% and 28% for gains made on residential property that doesn’t fall under ‘private residence relief’.
What are your options for reducing your Capital Gains Tax bill?
ISAs: Money held in ISAs are free from Income Tax and Capital Gains Tax, however there are limits on how much you can pay into an ISA each year (£20,000).
Pension contributions: pension allowances and tax reliefs are generous and many pensions remain the most tax-efficient form of saving.
Marriage allowances: If you are married or in a civil partnership you can hold investments jointly which means you will have two sets of Capital Gains Tax allowance. If one partner pays a lower rate of tax, more often than not it is sensible for them to hold the asset in their name solely which can also reduce the tax rate.
These examples provide a selection of strategies available for managing your wealth efficiently with regards to Capital Gains Tax. Financial planners are here to create a plan that works for you and your family’s needs and in turn helping to support your family’s Happiness Management.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.