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June 13th 2014 / BY: Wisteria

Information on Capital Gains Tax from a Tax Consultant

One of the most important aims of all businesses is to pay the correct but the lowest amount of tax possible and to ensure that this is achieved it is usually advisable to consult a tax consultant. Tax consultants are financial experts who assist clients with tax issues. They are also referred to as tax advisers and are trained in tax law. They stay up-to-date on the latest tax requirements, consult tax law handbooks and look for bulletins regarding common and typical tax procedures.

Tax consultants can help to ensure that you comply with all HM Revenue & Customs (HMRC) requirements and can forecast your tax and help you to plan ahead. Tax returns and tax legislation can be complex and most tax planning work requires a review of numerous taxes at one time, meaning that having specialist knowledge is important to achieve the optimal tax position.

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Capital Gains Tax is a tax on the profit or gain made after selling or disposal of an asset. It applies to assets owned such as shares and property. It is important to remember that the tax is on the profit or the gain received after selling the asset and not the entire amount received. Not all assets are liable to Capital Gains Tax, some assets are exempt, for example your main house or car or personal possessions disposed of for £6,000 or less. Usually Capital Gains Tax applies in the following situations:

  • On the sale of buy-to-let property
  • On the sale of your main home where it has not been your principal residence throughout the whole period of ownership
  • On the sale of shares, investments or antiques
  • On the sale of assets valued at more than £6,000, expect cars.
  • When an individual sells their business or company

Capital Gains Tax needs to be paid only when the overall gains are above the annual tax-free allowance. It is important to calculate the right gains and losses and when an asset is sold the gain and loss needs to be calculated separately on each asset. In the UK, a capital gain is usually realised when you sell, gift or otherwise dispose of an asset.

It is usually necessary to consult a tax consultant and a Chartered Accountant before and after the company formation process. A new company will have to consider a number of important matters on incorporation to ensure that it complies with administrative requirements, legal and practical issues and obligations. There are a number of business accountants in London who can be consulted for advice on tax and accounting services. Wisteria Ltd offers a consultation with a Business Adviser, Chartered Accountant or Chartered Tax Adviser, before and after setting up your company.

Wisteria Chartered Accountants, Business and Tax Advisers provide a variety of tax services for companies and individuals. For tax advice, information on our services or details on setting up a company in the UK, please contact 0208 952 0140 or email info@wisteria.co.uk.