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Reducing Your Capital Gains Tax Liability

To help minimise your capital gains tax bill, we’ve detailed a few strategies below that could potentially reduce your tax liability.

Transfer your assets

You may reduce your capital gains tax bill by transferring assets to your spouse or civil partner who pays a reduced rate of tax. Alternatively, you can reap the benefits of their allowance and avoid paying any capital gains tax on savings of up to £24,600.

Distribute sales across assets

You can take advantage of the tax-free allowance for each year by selling half of your assets one year and the other half the next. This will effectively double your CGT liability allowance.

Open an ISA

A maximum of £20,000 per year can be deposited into an ISA without incurring any CGT. Since it is possible to combine allowances, this number doubles for people who are married or in a civil partnership.

Carry forward your losses

If you report a loss in your tax return for a certain year, you can carry it over to the following year and use it to offset any profits from asset sales.

Increase pension contributions

By putting money into a pension, you can lower your taxable income and stay in a lower tax bracket. This could let you keep the 10% capital gains tax rate on non-residential assets.

Invest in an EIS

If an investment in an Enterprise Investment Scheme (EIS) is held for three years or more, gains achieved on the investment are exempt from CGT.

Seek professional guidance

The topic of CGT is complicated, so it’s important to consult a professional. We will make sure you take advantage of all available tax relief, exemptions, and allowances, as well as explain your options and recommend the best approach depending on your circumstances. Get in touch with us at hello@bkplus.co.uk for specialist advice and support.

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