When is Capital Gains Tax payable?

Any taxpayer is allowed to make tax-free capital gains of £11,700 during the 2018-19 tax year. There are also a number of circumstances when a disposal does not create a taxable gain. These include:

• The sale of personal assets worth less than £6,000
• Gifts to your spouse or civil partner
• Gifts to a charity.
• Gains when you cash in ISAs or PEPs
• Disposal of certain UK government gilts and premium bonds
• Betting, lottery or pools winnings
• Any personally owned car

If you are resident abroad, you will have to pay tax on gains you make on residential property in the UK even if you are non-resident in the UK for tax purposes. You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless you return to the UK within 5 years of leaving. You also need to file a gain on property with HMRC within 30 days of the conveyancing as well as on your personal Self-Assessment tax return. From 6th April 2019 that will apply to anyone – resident or non-resident – selling a UK property.
Even if gains are taxable there may be reliefs you can claim to reduce or defer any Capital Gains Tax that may be due. These reliefs include:

• Lettings relief when a property was your principal private residence and has since been let out
• Entrepreneurs’ relief on the sale of a business if you are an official of the company or 5% shareholder
• Business asset rollover relief when you reinvest the proceeds from a chargeable disposal into a new asset
• Incorporation relief when you change a sole trader or partnership business into a limited liability company
• Gift hold-over relief if you give away a business asset

The circumstances when these reliefs may be of use and the rules surrounding them can be complex and it is always wise to seek professional advice before actually making the sale so that you are aware of the potential liability.