14:50 PM, 27th October 2010, About 13 years ago
The latest capital gains tax (CGT) increase announced by the Chancellor George Osborne in June has added a massive £36 million in unnecessary tax payments, according to independent financial web site unbiased.co.uk.
Capital gains tax is charged on the disposal of investment property and rates currently stand at 28% for higher rate taxpayers and 18% for lower rate taxpayers.
Disposals include sales, gifts and transfer of ownership of all or part of a property.
The chancellor has recently announced that capital gains tax rules will remain the same for the lifetime of this Parliament, which gives investors the opportunity for tax planning.
The checklist for cutting CGT liability includes:
Karen Barrett, chief executive of unbiased.co.uk, said: “Capital gains tax has been a hot topic ever since the chancellor announced the increased CGT rate to 28% for higher rate tax payers. But even before that change, we have seen far too many people making unnecessary CGT payments – simply by not making use of tax efficient ways when it comes to disposing of their assets.
“There are many ways of reducing your CGT liability, but the tax system is complex and can easily be confusing for consumers to understand. Consulting an independent financial adviser is an easy way to get tailored tax advice on your individual tax liability, to help avoid making any unnecessary tax payments going forward.”
CGT planning for property investors also extends to other investments or assets, who can use their annual CGT exemption and then buy the assets back within a tax-efficient ISA in the new tax year, ‘washing’ out the capital gains.
For an introduction to The Money Centre’s recommended Tax Partner please telephone our Customer Care Team on 01603 894525.
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