Before you sell an investment, you need to think about the tax on any profits you make. In this video, Tim Bennett introduces capital gains tax.
How capital gains tax works
In this video, we'll cover the scope of capital gains tax, what kinds of people get caught, on what kind of deals.
What is taxed by capital gains tax?
Chargeable person: an individual, a company, or a partner in a partnership. You are only caught by capital gains tax if you make a chargeable disposal.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Chargeable disposal: if you sell something as a chargeable person you will probably end up paying some capital g t, but if you give assets away, thinking there are now sales processes to you can't be taxed, you would b wrong., inland revenue treat gifts ads chargeable disposals, they impute a market value into the transaction, so if you had sold it, this is what I would have been worth. Families, in particular, need to be careful. If you try to give assets away, inland revenue will look very suspiciously at gifts or transfers between you and people above you in the family tree, so parents or grandparents, at anything you do either side of you, at your wife or brothers and sisters, and they'll look at what you gift or transfer below you, at children or grandchildren.
Chargeable asset: the following is a list of what is not deemed a chargeable asset:
- Your main property (your first home, not a holiday home or second property). If you buy a house and sell it for a profit, the profit is not a chargeable asset.
- Assets that are small and worth up to £6,000.
- Individual savings accounts contents.
- Betting gains.
Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.
He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.
Should your business invest in a VoIP phone service?
Here's what you need to know about VOIP (voice over IP) services before landlines go digital in 2025.
By David Prosser Published
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published