Despite this bigger bill, the number of people who had to pay capital gains tax (CGT) has continued to fall. Last year 265,000 taxpayers paid CGT, down from 276,000 in 2018-19 and 281,000 in 2017-18. The latest figures show that nearly 41% of CGT is paid by around 2,000 taxpayers who made £5m or more in taxable gains. However, with the CGT allowance set to remain at £12,300 until 2026, it’s expected that more and more people will find themselves with a CGT tax bill in the coming years. There was much speculation about an overhaul to the CGT system last year, after Chancellor Rishi Sunak ordered an urgent review from the Office of Tax Simplification (OTS) in July 2020. The OTS has since delivered two reports suggesting ways CGT could be altered, but no changes have yet been announced
What is capital gains tax? You might need to pay CGT if you make a profit after selling a valuable asset or assets, and the profit exceeds your CGT allowance (£12,300 for 2021-22, unchanged from 2020-21). The rate you pay depends on the kind of asset you’re selling and the rate of income tax you pay. Basic-rate taxpayers (whose income is between £12,501 and £50,000 in 2021-22) are charged 18% on property sales, and 10% on the sale of assets – including personal possessions, plus shares, bonds or funds. Higher and additional-rate taxpayers are charged 28% on property and 20% on assets. You won’t be charged CGT if you’re selling your main home – instead, the tax applies if you sell a second home or buy-to-let property.
Here at BM & Co Accountants we have professionally trained accountants on hand to give you the information and advice you need so you can manage the Capital Gains journey more easily. It’s our job to save you time and money, and to help you navigate the complexities of the tax system that HMRC throws your way.
Send us an email at enquiries@bmaccountants.com. A member of our team will get back to you as soon as possible and give you the help you need.