Capital Gains Tax raises billions of pounds for the government every year and it’s safe to say it’s a decidedly unpopular tax amongst all those who have to pay it! In this short blog, we’ll look at the ins and outs of Capital Gains Tax and consider how accountants in Bristol and elsewhere can ensure you don’t overpay. Let’s cover what you need to know.

What is Capital Gains Tax

Capital Gains Tax is charged if you give away, sell, exchange or dispose of any asset that gives you a profit. The tax is levied on the profit only, not the total sale or transfer value. But for people who may have bought, for example, buy to let properties before the boom, the CGT liabilities can be considerable.

To make things even more challenging, Capital Gains Tax is a notoriously complex subject and it isn’t taken at source when the sale or transfer takes place. It is up to you to know whether you are due to pay CGT and if you are, you will have 60 days after the transaction takes place to proactively submit the payment to HMRC.

How to calculate CGT

The calculations for Capital Gains Tax can be complex. To make things harder, the allowances that give you a tax-free profit portion have been rapidly reduced from an original buffer of £12,000 to just £3,000. The rates applicable for the tax have also increased dramatically and depend on your personal tax situation. There are calculators available online but the best way to know if you need to pay CGT and how much you need to pay is to contact qualified accountants Bristol, such as https://www.chippendaleandclark.com/accountants-near-me/bristol for expert advice.

How can accountants in Bristol help with CGT?

Accountants in Bristol can help to work out the correct figure by applying legal reductions for items such as costs of buying the property and maintaining or improving it before the sale. There are various allowable deductions but these can be challenging to calculate. An accountant can do it all for you!