Capital Gains Advice

Capital gains tax (CGT) is triggered by the transfer of value of an asset. This does not have to mean encashment or sale but will occur when transferring your asset into another person’s name, e.g. from father to son. The exception to this rule is the transfer of assets between spouses.

A certain degree of capital gain is allowed in any tax year, currently standing at £9,600 per person. Individual's gains are added to income and charged at 18%. Thus, capital gains tax is really just another form of income tax.

On the positive side, with a current £9,600 CGT exemption per individual per annum, a married couple can generate £19,200 of tax-free income, provided suitable investment vehicles are used. When combined with measures to mitigate income tax, using a married couple’s personal allowances, this gives an annual tax-free income of around £31,270.