Capital Gains Tax: What it Is, How it Works, and How We Can Help

Capital Gains Tax (CGT) is a type of tax that is incurred due to the profit you make when selling or ‘disposing of’ an asset that has increased in market value, since the market value upon initial purchase.

Tax is paid on the gain that you make, for example, on selling a property in the UK. In other words, CGT is not paid on the full value of the sale.

Capital Gains Tax is separate from income tax, but you still need to consider all your other income to calculate the correct amount of Capital Gains Tax. Calculating Capital Gains Tax can be quite a complex process but using Tax Dashboard and with the help of our qualified accountants, we can assure you that you will not need to pay a penny more in tax than you ought to.

We have saved clients thousands in Capital Gains Tax, due to our level of expertise in taxation (knowing what can and cannot be claimed and the reliefs you’re entitled to) as well as the frequency and volume in which we prepare and compile such calculations.

How TaxDash can help you with Capital Gains Tax

We add an enormous amount of value to you in the following manner:

• Analyse property expenditures to distinguish between capital and revenue expenses accurately.
• Provide a comprehensive list of eligible expenses considered as capital improvements.
• Maintain detailed records of property occupancy for precise Capital Gains Tax calculations.
• Incorporate the previous year’s capital losses into the current year’s gains calculation.
• Aid in currency conversion for non-UK property sales using spot rates.
• Advise on optimising Tax-Free Allowances in the most tax-efficient manner.
• Consider all income sources to accurately calculate Capital Gains Tax liabilities.
• Calculate tax for multiple property owners individually, if applicable.
• Schedule consultations to discuss strategies for minimising Capital Gains Tax.
• Assist in online declarations and provide thorough documentation.
• Minimise HMRC inquiry risks by providing comprehensive tax calculations.
• Ensure timely tax return submissions within the 60-day timeframe.

The process and information required for your CGT Calculation

1. Log in to TaxDash and navigate to the income section on the left-hand side and click on the Property Dashboard.
2. Click on the word “edit” next to the street name.
3. Importantly, please change and update the purchase information of the property by entering the crucial costs like legal fees, stamp duty etc.
4. Scroll to the bottom and ensure that you go into each of the sections to enter all the relevant information. Such as periods you have lived in the property, improvements done etc.

Other information required for the CGT on disposal of UK property return

• Have you sent a self-assessment tax return for the tax year the property was disposed of (6Apr – 5Apr)?
• Do you want to include any other Capital Gains Tax losses made in the relevant tax year?
• Do you want to include any other Capital Gains Tax losses made in previous tax years?
• How much of your Capital Gains Tax Annual exempt amount do you want to use? The total amount, or only a portion, or none (you would choose the latter two if you’re using your allowance on other capital gains during the tax year)
• What do you expect your total gross income will be for this tax year?
• What is your Personal Allowance for the tax year?
• The property value on 31 March 1982 (known as ‘rebasing’) if you were a UK resident at the time of the disposal and owned the property on or before 31 March 1982

Information required for the CGT on disposal of UK property return – further info required for UK non-residents

• Non-residents only: The residential property value on 5 April 2015 (known as ‘rebasing’) if you were a non-resident at the time of the disposal and owned the residential property on or before 5 April 2015 (a figure is required to be completed in the CGT account, even if not used in the calculation – if we don’t have this, then we need to estimate a figure. It will not affect the calculation)
• Country of residency at the time of exchanging contracts (it’s usually the day you and the new owner swapped contracts and you paid a deposit)

Our fees are charged on an individual basis. We would therefore ask that you log as much information as possible onto TaxDash in order for us to accurately review and deliver a formal proposal with a fixed fee and an engagement letter for you to sign in order for us to proceed with the calculation.