27 February 2017

Capital Gains – an introduction to exemptions & transfers

Tax Advice

Each tax year, you have an annual exemption for capital gains tax.  Any disposals with a gain that is under this figure are exempt from capital gains tax. This annual exemption cannot be carried forward and must be used in the tax year in question otherwise it is lost.

For individuals with a large share (or other qualifying asset) portfolio, this means that you can use your tax-free allowance each year by selling off just enough shares (or other qualifying assets) to realise a gain equivalent to the annual exemption.  This strategy can significantly boost your return over a number of years.

Capital Gains Tax Transfers between spouses and civil partners

Each spouse has their own annual exemption for capital gains tax.  Check with us what the current exemption is.

Assets can be transferred between spouses at nil gain or loss.  Prior to selling an asset, by transferring the asset into joint names or solely to your spouse or civil partner, you can utilise your spouse or civil partner’s annual capital gains tax exempt amount as well as your own if he or she has not used it. 

Once an asset has been transferred, the spouse or civil partner takes over the base cost and length of ownership of the original owner.

If a transfer of land or property is made between spouses or civil partners, there may be stamp duty land tax arising which needs to be considered.

Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy Limited. You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.

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