Capital gains tax: HMRC tool helps Britons determine if they should pay | Personal finance | Finance
Capital gains tax is a levy on the profit a person makes when they sell or give away something that has increased in value, usually property. It can be confusing, but HM Revenue and Customs (HMRC) has a handy tool to help Brits work out exactly how much tax they need to pay.
Britons who sell assets whose total taxable gains exceed their annual capital gains allowance of £12,300 are liable to pay capital gains tax (CGT).
Simply put, basic rate taxpayers pay CGT at 10%, rising to 20% for higher rate taxpayers.
This goes up to 28% when people sell an investment property or a second home.
However, there are certain exceptions that people can take advantage of to pay less tax to HMRC.
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When determining how much tax to pay, the gain is generally the difference between what someone paid for their property or asset and the amount they got when they sold it. has sold.
Taxpayers can work out how much CGT they have to pay by using HMRC’s Capital Gains Tax Calculator on their website.
It can be used to calculate the gain on all assets, not just property.
The site also explains the other exemptions in more detail.
There have also been other significant changes to the CGT process that should make life easier, such as:
- Single Customer Account: Customers will be able to do everything from one place.
- Better terms for separated and divorced couples: The government is consulting on extending the ‘no gain or loss’ window on separation and divorce over the next year.
- Rollover Relief Expanded: The government has also accepted OTS’s suggestion to expand the current rollover relief provision. This reduction concerns the CGT billed to company directors.
- Improved advice: Expect better advice on UK property tax returns, business investment schemes, tenants, people working from home and apartment management companies.