CGT

Capital Gains

Capital Gains Tax (CGT) is a tax charge applied to the gain from the sale of something you own. It is calculated from the gain made (the increase in value of the sale price compared to the purchase price) for an asset held for more than one year.

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When do you have to pay Capital Gains Tax?

CGT isn’t as simple as declaring your gain and applying the relevant rate. Firstly there is the annual CGT allowance of £12,300. This is the amount of profit you can make before CGT is applied. If you’re gains are under this amount in the tax year then there is no CGT liability. However, you can’t carry forward to the following year if you don’t make use of the allowance when selling your assets.

How does Capital Gains Tax work?

Where your gains are above the annual allowance, you have to apply the appropriate rate to the gain you have made on the asset(s) in question. Where you own an asset with another person, such as in a marriage, you can both apply for your allowances. This means where a gain is made on the sale of a second home, for example, you can double the amount you make to £24,600 before CGT becomes applicable.

You are also allowed to transfer assets between partners in a marriage or civil relationship to help reduce your CGT liability. If you do transfer an asset to a partner and later make a gain on selling it, the amount of CGT due will be based on the total time you owned the asset as a couple, not from the date when it was transferred to your partner.

Of note, this should always be done after taking specific advice because other reliefs may apply.

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Gower Accountants Can Help with Capital Gains Tax

As experienced tax accountants in Leicester, we can not only offer expert capital gains tax advice, but we can also identify the best capital gains tax planning strategies for you.

By offering specific CGT advice based on your unique circumstances, we can help you to maximise the potential of your financial affairs.

 

Capital Gains Tax Considerations

CGT isn’t as simple as declaring your gain and applying the relevant rate. Firstly, there is the annual CGT allowance of £12,300 to consider. This is the amount of profit you can make before CGT is applied. If your gains are under this amount in the tax year, there is no CGT liability. However, you can’t carry forward to the following year if you don’t make use of the allowance when selling your assets.

Next to consider is the CGT allowance of a shared asset. Where you own an asset with another person, such as in a marriage, you can both apply for your allowances. This means where a gain is made on the sale of a second home, for example, you can double the amount you make to £24,600 before CGT becomes applicable.

You are also allowed to transfer assets between partners in a marriage or civil relationship to help reduce your CGT liability. If you do transfer an asset to a partner and later make a gain on selling it, the amount of CGT due will be based on the total time you owned the asset as a couple, not from the date when it was transferred to your partner.

These are just some of the considerations to remember when sorting CGT; other reliefs may apply. Without the assistance of a tax expert, you could very easily end up paying a lot more CGT than necessary.

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Frequently Asked Questions

Learn How it Works!

We understand that accountancy and tax can be complicated, and you are likely to have many questions. At any time, you can book a no-obligation consultation in which we can provide answers specific to your circumstances. For more general enquiries, however, feel free to browse our FAQs!

What does “chartered” mean?

A chartered accountant is an accountant who has studied accounting to a high level and completed three to five years' work experience, earning them a professional accreditation. Once qualified, a chartered accountant can join the ACCA (Association of Chartered Certified Accountants) or another professional body.

While a regular accountant is generally capable of providing straightforward accountancy services, a chartered accountant can become a far more valuable asset to your business. Due to their in-depth expertise, chartered accountants can advise on specific business and financial matters, including corporate finance, cash-flow forecasting, forensic accounting, and advanced tax planning.

As chartered accountants in Leicester, Gower are proud to uphold the professional and ethical codes of the ACCA - and we are dedicated to using our chartered status to help Owner-Managed Businesses in as many ways as possible.

I already have an accountant, do I need to change?

Does your existing accountant offer you a pro-active, flexible service at an excellent rate? Are they easily contactable? Do they save you money, and help you to make profitable business decisions?

If so, then it sounds like you’ve got a keeper! However, if you answered no to any of the questions, or fancy exploring your options a bit, then please get in touch for a free, no-obligation consultation.

Not all accountants were created equal; some simply provide a better service, save you more money, and provide more advanced levels of business advice. If you’d like to see just how much an expert chartered accountant can benefit your Owner-Managed Business in Leicester, Gower is ready to show you.

Are you the right accountants for my business?

We understand that choosing an accountant for your business is not a small decision, and one that should not be taken lightly. You need an accountant that you can trust, who will get to know your business inside-out and will always operate in your best interests.

We’re not saying that we’re perfect for everyone - but we do have decades of experience working with Owner-Managed Businesses of all sizes, across a vast range of sectors. Once we partner up with someone, we take the time to understand their business, their needs, and their goals - and then we give it our all. This has granted us a reputation of which we are very proud.

The best way for you to see if we’re a good fit is to talk over the phone, or meet for a coffee - a free meeting, with no obligation. Let’s have a chat about how we can help your business.

I need help urgently! What can you do?

If you are experiencing an accounting emergency, we would kindly ask you not to panic. We can help!

Our Accounts Emergency corner has gotten more than a few Owner-Managed Businesses out of a tight jam. If your accounts are in a bit of a mess, or you’ve received a nasty letter from HMRC, or anything else, we’ll fast-track you and offer a quick solution.

What are the benefits of hiring an accountant?

There are many benefits to hiring a good accountant. In addition to keeping your books, managing your payroll, and keeping your accounts up to date, your accountant can actually help you to save money and boost the profitability of your business.

The main benefits of hiring a chartered accountant in Leicester include:

  • Keeping you compliant - As an Owner-Managed Business, you are legally required to provide records of your accounts informatively, accurately, and consistently. There are a series of tax deadlines that must be met throughout the financial year, and if one of these is missed, it will result in a penalty.

As your trusted accountants, we can take care of everything, and thus guarantee that you remain in HMRC’s good books.

  • Reducing your taxes - Knowledgeable accountants can find legitimate ways to keep your tax payouts as low as possible. Whether through government schemes, flat rate schemes, or expense claims, there are many ways of reducing the tax that most businesses don’t know about.

As tax experts, we can ensure that you never pay a penny more in tax than necessary.

  • Making profitable business decisions - In order to make good business decisions, substantial knowledge of finance is often required. Without the knowledge of your business’s financial history, current state, and future forecast, your business could easily take a wrong turn.

By analysing your business’s finances and calculating logical forecasts, we can help to guide your business down the most profitable path.

Is it easy to change accountants?

If your current accountant isn’t providing the level of service you want, and you would like to move over to us, then the process couldn’t be simpler.

All it takes is just one letter from you, and then we take care of the rest. In most cases, your existing accountant cannot charge you for providing the standard handover information.

You seem to offer a lot, are your fees expensive?

We do indeed offer a wide range of accountancy services in Leicester - but our packages are tailored to match the specific needs of you and your business. We will never impose a service that you do not truly need.

Are we the cheapest accountants in Leicester? Probably not. But as far as value for money goes, we are confident that we cannot be beaten.

As with most things, the cheapest accountant is often the most expensive in the long run. Every penny that you spend with us will be applied with purpose, putting it to the best possible use - not just saving you money, but also increasing the profitability of your business.

As experienced, dedicated, highly-knowledgeable chartered accountants in Leicester, we provide a service that almost instantly repays itself in the value-added to your business.

Get In Touch!

Based on the outskirts of the city centre, Gower Accountancy is only a 5 minute walk from Leicester railway station which is easily accessible by public transport and we also provide ample parking for those who wish to visit by car.

Contact Gower Accountancy today for your Free 30 Minute Consultation to see how we can help you and your business:

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0116 220 6019
0800 612 7122

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250 Humberstone Road,
Leicester, LE5 0EG