You may be wondering how to avoid Capital Gains Tax, a tax which is surrounded by many confusing exemptions and conditions as to which capital assets are liable for taxation and which are free of it. Several exemptions and mitigating factors that can help reduce the tax burden are listed here:
- The first £9,200 of capital gains each year is exempt from tax.
- If you are married or in a civil partnership, you both benefit from this annual exempt amount, and so joint ownership of assets can maximise the use of the exemption.
- Your primary private residence may be exempt, as long as it conforms to certain conditions. However, if you are married or in a civil partnership, both of you must have the same main residence nominated.
- Taper relief reduces the tax payable on the capital gains of an asset, based on the length of time that you have held the asset and whether it is business or non-business in nature.
For more advice and information, take a look at our Fair Investment Tax Bookshop and check out the handy guides and software.