Capital Gains Tax Service

Capital Gains Tax is paid when an asset is chargeable. The chargeable assets include: personal possessions worth above the value of £6,000, any asset that is not your main apartment, shares (with the exemption of those listed as an investment, or under the tax-free scheme), and assets that are used for business (this does not include stock-in-trade). The application of these rules can be complex. Thus, it is best to seek the assistance of a tax advisor or accountant in order to have a clearer understanding of what assets can be charged for Capital Gains Tax upon disposal. You can always reach our accountancy firm for any enquiries.

Based on the provisions of TCGA 1992, certain assets are tax-free. This includes:

• Winnings from bets, lotteries and pools

• Compensation or damages received as a result of any loss suffered by an individual or corporate organisation or the asset in custody cannot be charged for gains

• When a government issues a savings certificate, securities or high premium bonds, it cannot be charged for gains when disposed of

• Interest in a settled property that is later disposed of cannot be charged for gains

• Main residences and wasting assets

• Gains made from the disposal of shares under the Business Expansion Scheme (BES)

SEIS stands for Seed Enterprise Investment Shares enjoyed by UK taxpayers. It was introduced in 2012 by HMRC to help small start-ups raise funds by providing tax reliefs to any investor who holds share interest in the company. Thus; SEIS allows you to claim relief of about 78% or more on about £100,000 investment. On Capital Gains Tax, there is an exemption on earnings from shares. Also, profits realised within a period of three business years and reinvested in SEIS enjoys capital gains exemption. Meanwhile, you should be aware that your SEIS tax-relief cannot be carried forward.

Capital gain is the profit made when an original investment is disposed of. Capital loss on the other hand is the loss incurred when an investment is sold less than the original purchase value. To determine whether it is a gain or loss, the amount that has been gained is divided by the original amount invested. If the percentage appreciates, it is classed as a gain (and vice versa). If you experience a loss in investment in a tax year, it is advisable to sell assets that have a good return on investment as soon as possible. The losses can be employed to compensate for gains in the same year.