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Financial > Tax Planning > Capital Gains Tax
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The British government is entitled to a proportion of any increase in value that arises when most assets are disposed of by British citizens anywhere in the world.
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Each year there are changes to the proportion of tax which is payable and they are announced in the annual Budget. From time to time those changes are wholesale and so assets that have been owned for a long time can be subject to four sets of rules. In 2007/2008 tax year every UK individual can make a gain when selling an asset of £9,200 without any liability for capital gains tax. Any profit above that figure is added to the total taxable income of that individual and taxed at their highest marginal rate, although this means either 22% or 40% as the lower rate is not available for capital gains. There are a host of allowances by which the tax can be reduced if the sale is planned in advance.
A perfect example of how extreme changes can be would be the rules to be effective from 6th April 2008, but announced on 9th October 2007, affecting every type of investment and withdrawing concessions granted as far back as March 1982. Any disposal on or after 6th April 2008 will suffer a tax charge representing 18% of the difference between the original cost and the sale proceeds.
IT IS VITAL THAT YOU CONSIDER YOUR EXPOSURE TO CAPITAL GAINS TAX NOW TO AVOID NEEDLESS TAX BEYOND THE END OF THE 2007/2008 TAX YEAR.
This tax is often referred to as a voluntary tax because investors can control when it becomes payable and, to some extent, how much tax is payable too.
To keep the Capital Gains Tax to a minimum you should contact Corrigans before you sell any asset.
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