Capital Gains Tax (CGT) Planning Check List 2024-25

• Make sure you utilize your annual tax-free allowance of £3,000. Consider selling assets, shares for example, which can be sold within the tax-free allowance.
• If your chargeable gains are likely to exceed the £3,000 limit, are there any assets you can sell at a loss to reduce the total gains below the tax-free limit? It is no longer possible to sell and buy-back shares to facilitate this planning option: the so-called “bed and breakfast” arrangement.
• If you are contemplating the sale of your business, make sure you have arranged your affairs such that you can claim Business Asset Disposal Relief. This will potentially allow you to make qualifying gains of up to £1m and only pay CGT at 10%.
• As the level of your taxable income, for income tax purposes, will affect the rate of CGT you will pay, investigating ways to reduce your income tax earnings may save you CGT as well as income tax.
• A gift of chargeable assets to your spouse does not create a CGT charge.
• Your spouse and children also qualify for a separate tax-free allowance of £3,000. Transferring assets between family members can reduce overall CGT liabilities if considered before a sale.
• It may be possible to claim other reliefs to reduce your potential liability to CGT. These could include rollover and hold-over gains reliefs. If you are likely to make significant capital gains during 2024-25, please contact us for advice as soon as possible so that we can explore available strategies for minimizing your CGT bill.
• Although the sale of your main home is generally free of CGT, if you have let the property at any time during your period of ownership, or if you have made significant use of the property for business purposes, then there may be a CGT liability when you sell. If you are affected, make sure you take advice on this issue.
• CGT payable on chargeable disposals after 5 April 2024 and before 6 April 2025 will be due for payment 31 January 2026. If you delay the disposal until after 5 April 2025, any CGT due will be payable a year later, 31 January 2027. Theoretically, you could delay a disposal by one day (from the 5 April to the 6 April 2025) and this would extend the amount of time you would have to pay the tax by 12-months.
• The only exception to the above payment dates is if you are selling a residential property that is not covered by Private Residence Relief. For example, a personally owned let property or a holiday home. Gains on these property disposals have to be filed with HMRC – and any CGT paid – within 60-days of the property disposal (the completion date not the exchange of contracts date).
• Review all the assets you own that are currently worth less than you paid for them. Should you dispose of them and make use of the capital losses? Which would be the best tax year to register the loss? This could include a claim to treat shares as having no value (a negligible value claim).