Capital Gains Tax Planning

Capital Gains Tax (CGT) is a tax that you will most likley be exposed to when a profit or gain is made through the disposal of an asset, although there are other situations where CGT may arise without a disposal.

A disposal may be in the form of selling the asset, giving it away as a gift, transferring the asset to someone else or receiving compensation for it. CGT is applicable only to the gain you make, not the amount of money you receive for the asset.

The current rate of CGT is payable at 18% by a basic rate taxpayer. However where total income and gains exceed the basic rate band in a tax year, the rate increases to 28%.

Importantly, where there is a disposal of a business or shares in a trading company and the conditions are met then the entrepreneurs reliefs should able to apply and then the first £10m of gains would be taxed at 10%.

An important aspect of CGT planning is the structure of any investments you might make. For example, if you were to invest in an Enterprise Investment Scheme, you could be free of CGT on a disposal that meets the criteria or where old gains are reinvestment into EIS shares able to defer payment of Capital Gains Tax until a later date.

Additionally, CGT planning for non UK domiciles can be complex but highly beneficial and if you are non UK domiciled you should seek advice to see if a more beneficial investment structure is available to you.

At CLB Coopers we seek to minimise our clients exposure to CGT by carefully planning investments and acquisitions to match our clients specific needs and circumstances.