When it comes to managing your finances, understanding the intricacies of taxation is crucial. One such tax that can impact individuals and businesses alike is Capital Gains Tax (CGT). If you reside in the United Kingdom and have made gains from selling certain assets, it's important to understand any potential liabilities due in relation to CGT. In this article, we'll explore the essentials of UK CGT, including what it is, who it applies to, and the key dates.

What is Capital Gains Tax (CGT)?

Capital Gains Tax (CGT) is a tax levied on the profits or gains made from selling or disposing of certain assets. These assets can include:

1. Property: This includes not only real estate but also second homes and rental properties.

2. Shares: Profits from selling shares in a company.

3. Personal Possessions: Valuable items like artwork, antiques, and jewellery if they were sold for more than £6,000.

4. Business Assets: Assets used in a business such as machinery, equipment, and goodwill.

Who Does Capital Gains Tax Apply To?

Capital Gains Tax applies to a wide range of individuals and entities, including:

1. Individuals: If you're an individual, you may be subject to CGT on any gains you make from the sale of certain assets.

2. Trusts: Trustees are responsible for paying CGT on gains made by a trust.

3. Non- UK Residents: Non-residents who sell UK property are also required to pay CGT on any gains made.

Companies are subject to Corporation Tax on their capital gains, which is distinct from CGT.

Key Capital Gains Tax Filing Dates

Staying on top of your tax responsibilities requires careful planning and adherence to specific filing deadlines. Here are the essential CGT dates to remember:

1. Disposal Date: This is the date you actually sell or dispose of the asset. It's crucial to keep accurate records of the sale as this will determine when the gain is realized.

2. Deadline for Reporting Gains and Paying Tax: For individuals and trustees, you must report and pay any CGT due by the self-assessment deadline of 31 January following the end of the tax year in which the gain was made. For example, if you made a gain during the 2022/2023 tax year, you would need to report and pay the tax by 31 January 2024.

3. Payments on Account: If you're required to make payments on account for your Capital Gains Tax, these are typically due by 31 July and 31 January respectively.

4. Residentail Property Disposals: If you're selling a UK residential property, you must report the sale to HMRC within 60 days of completion and pay any tax owed at the same time. There are certain circumstances in which the 60 day reporting requirement does not apply, for example, where the property is your main home and you are claiming Primary Residential Relief on the full amount.

Next steps

Are you still not sure what you need to do by when in order to stay compliant with HMRC?

Or are you wondering if any of this even applies to you?

Don’t worry, we get it. At Beancrunch we specialise in providing tax services to individuals and small businesses. Get in touch with our team today to find out more about how we can help you:

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