π’ Capital Gains Tax: What You Need to Know! π°
Posted on 5th February 2025 at 10:18
π° Understanding Capital Gains Tax (CGT) π°
Capital Gains Tax (CGT) is a tax on the profit you make when selling or disposing of an asset. This can include selling, gifting, swapping, or compensation for a loss. π
Who Pays CGT? π€
β’ Sole traders & partnerships β Youβre taxed because thereβs no legal separation between you and your business.
β’ Limited companies β Pay Corporation Tax instead of CGT.
CGT can be tricky, so hereβs a quick breakdown! π
CGT for Individuals π‘ππΈ
π Selling Your Home? No CGT if: βοΈ Itβs your only home & main residence βοΈ You didnβt buy it to flip for profit βοΈ The land is under 5,000 sqm
π Selling Your Car? No CGT unless it was used for business.
π Exempt Assets: βοΈ Gifts to spouse/charity βοΈ ISAs, government bonds, lottery winnings π
CGT for Businesses π’
πΉ Limited companies pay Corporation Tax on asset sales. πΉ Sole traders & partners pay CGT on business assets.
How is CGT Calculated? π
CGT is paid on the profit, not the sale price. Subtract costs like advertising fees or improvements before calculating tax. π
CGT Allowances π―
You donβt pay CGT if your total gains are below: π
2023/24 β Β£6,000 (Individuals) / Β£3,000 (Trustees) π
2024/25 β Β£3,000 (Individuals) / Β£1,500 (Trustees)
Taxable Gains Examples π‘
β
If you make Β£8,000 in gains (2024/25), only Β£5,000 is taxable!
β
If a trustee makes Β£4,000 in gains (2024/25), only Β£2,500 is taxable!
β
If you make Β£12,000 in gains (2023/24), only Β£6,000 is taxable!
CGT can be tricky, but now you know the basics! ππ‘ Save this for later! π₯ #CGT #TaxTips #MoneyMatters #JSB
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