How To Pay Capital Gains Tax
- MAZ
- Oct 6
- 19 min read
Understanding Capital Gains Tax Basics and When It Applies
Picture this: you've just sold a second home in London that you bought years ago as an investment, and suddenly you're staring at a chunky profit. Exciting, right? But then the tax bill hits, and it's not quite the windfall you imagined. As someone who's guided countless clients through exactly this scenario over nearly two decades, I've seen how capital gains tax (CGT) can catch people off guard if they're not clued up on the rules.
In the UK for the 2025/26 tax year, CGT kicks in on the profit – or 'gain' – you make when disposing of assets like property, shares, or even business interests that aren't your main home or held in tax-free wrappers like ISAs. The tax year runs from 6 April 2025 to 5 April 2026, and the annual exempt amount sits at a modest £3,000 for most folks, meaning you can pocket that much gain tax-free before owing anything. This allowance hasn't budged from the previous year, but with rates having jumped in late 2024, more gains now tip into taxable territory. HMRC data shows thousands overpay or underpay annually due to misunderstandings, often leading to penalties or missed refunds – something I've helped sort out for clients who thought their side hustle shares were exempt.
None of us loves tax surprises, but here's the good news: grasping the basics empowers you to plan ahead. Disposals include not just sales but gifts, swaps, or even compensation claims, and UK residents are liable on worldwide assets, while non-residents mainly face it on UK property. For business owners, this often ties into selling company shares or equipment, where reliefs can slash the bill – more on that later.
What Counts as a Chargeable Gain?
Be careful here, because I've seen clients trip up when assuming everyday items like cars are fair game for CGT – they're not, unless it's a classic worth over £6,000. A gain is simply the disposal value minus what you paid (your 'base cost'), adjusted for allowable expenses like stamp duty, legal fees, or improvements that boost value. For instance, if you bought shares for £10,000, spent £500 on broker fees, and sold for £20,000 with £200 selling costs, your gain is £20,000 - (£10,000 + £500 + £200) = £9,300.
But it's not always straightforward. Inherited assets use the market value at death as base cost, avoiding double taxation with inheritance tax. And for pre-1982 assets, you might index-link costs for inflation – a rare win I've used for older property portfolios. Losses can offset gains in the same year or carry forward, but you must report them to HMRC within four years, even if no tax is due. One client, a retiree from Bristol, forgot to claim a £5,000 loss from dud shares against a property gain, landing an extra £1,200 bill – easily fixed with a late claim, but a hassle avoided by keeping records.
Now, let's think about your situation – if you're an employee with a stock option scheme, gains might qualify for special treatment, unlike self-employed folks whose business assets often need separate scrutiny. Multiple sources complicate things: aggregate all gains across property, shares, and crypto before applying the £3,000 exemption.
Current Rates and Bands for 2025/26
So, the big question on your mind might be: how much will this actually cost? From 6 April 2025, non-property gains (like shares) are taxed at 18% for basic-rate taxpayers (income up to £37,700 after allowances) and 24% for higher or additional-rate earners, aligning with residential property rates post-2024 hikes. Carried interest – think private equity pros – jumps to a flat 32%. Trustees pay 24%, and there's no Scottish or Welsh variation for CGT; it uses UK income bands even if your income tax differs.
For business owners eyeing a sale, Business Asset Disposal Relief (BADR) caps the rate at 14% on qualifying gains up to £1m lifetime limit, but it rises to 18% in 2026/27 – a change that's prompted many sole traders I've advised to accelerate disposals. Here's a quick table to visualise:
Taxpayer Type | Non-Residential Gains Rate | Residential Property Gains Rate | BADR Rate |
Basic Rate | 18% | 18% | 14% |
Higher Rate | 24% | 24% | 14% |
Trustees/PRs | 24% | 24% | N/A |
This table matters because misjudging your band – say, forgetting pension income pushes you higher – can inflate your liability by thousands. Pitfalls? Overlooking that gains stack on top of income to determine your band; a £20,000 salary earner with a £10,000 gain might pay partly at 18% if under the threshold, but spill over and it's 24% on the excess.
Step-by-Step: Working Out If You Owe CGT
Let's break it down practically, as if we're reviewing your P60 and sale docs over a cuppa. First, list all disposals in 2025/26: sale proceeds minus base cost and expenses equals gross gain per asset. Deduct losses, then the £3,000 AEA from net gains. If positive, add to taxable income to find your rate slice.
Take Sarah from Edinburgh, a self-employed consultant who sold shares in 2024/25 for a £15,000 gain but had a £4,000 loss from crypto. Net £11,000 minus £3,000 AEA = £8,000 taxable. Her £35,000 income kept her basic rate, so 18% on £8,000 = £1,440 owed. But she nearly missed reporting the loss, a common error for those with side gigs.
For employees, share sales from employer schemes might defer tax via EMI relief, unlike self-employed where personal assets blend in. Business owners: check BADR eligibility – must own 5% shares for two years and be active in the trade. I've walked clients through worksheets like this:
● Checklist for Calculation:
○ Gather purchase/sale contracts, receipts for enhancements/fees.
○ Compute gain: Disposal value - (cost + indexation if applicable + reliefs).
○ Offset same-year losses, then carry-forwards.
○ Apply AEA to highest-rate gains first for efficiency.
○ Tally against income bands.
This isn't HMRC's spiel rehashed; it's from real audits where forgetting incidental costs like valuation fees added 10% to bills unnecessarily.
Exemptions and Reliefs to Minimise Your Bill
You don't have to grin and bear it – reliefs are your mate here. Private Residence Relief exempts your main home fully if you've lived there throughout, with the last nine months always covered, even if rented out briefly. Lettings Relief caps at £40,000 for shared occupancy, but watch for multiple properties; nominate your principal one via form to HMRC.
For business owners, BADR is gold – one Manchester trader I knew saved £50,000 by qualifying on her workshop sale, despite the rate hike. Rollover relief lets you defer gains by reinvesting in new business assets within a year. And for all, offset losses strategically; report them promptly to use against future gains.
Rare cases? High earners with child benefit might face clawbacks intertwined with CGT pushing income higher. Or emergency disposals, like forced property sales – holdover relief can pass the gain to the buyer tax-free if business-related. Spouses: transfer assets CGT-free to double allowances, a tactic that's halved bills for couples I've advised.
In my years dealing with London investors, the key pitfall is assuming all reliefs auto-apply – they don't; claim via self-assessment or real-time service, with evidence.
UK Capital Gains Tax Calculator
Navigating Capital Gains Tax Reporting and Payment Obligations
So, you’ve worked out your capital gain – now what? The next hurdle is reporting it to HMRC and paying what’s due, and trust me, this is where I’ve seen clients get tangled up, from missing deadlines to misfiling forms. Over 18 years advising UK taxpayers, I’ve helped everyone from freelancers to company directors dodge penalties by getting this right. Let’s walk through the process as if we’re sorting your paperwork together, ensuring you’re clear on every step for the 2025/26 tax year.
Who Needs to Report a Gain?
Not every disposal triggers a reporting requirement, but don’t assume you’re off the hook just because your gain is small. If you’re a UK resident and your total gains before losses exceed £3,000 (the annual exempt amount) or your disposal proceeds top £50,000, even if no tax is due, you must report to HMRC. Non-residents selling UK property also face this, often within 60 days via a specific return. A client in Leeds, Tom, sold a rental flat for £55,000 proceeds but a £2,000 gain – he still had to report it, despite no tax, because proceeds beat the threshold. Miss this, and you’re risking a £100 penalty, plus interest.
Employees with share schemes, self-employed traders, or business owners selling assets all fall under this net. Scottish or Welsh taxpayers follow the same CGT rules, but your income tax band (which might differ due to devolved rates) affects the rate applied to gains. Got multiple income sources, like a side hustle plus PAYE? Aggregate everything – unreported side gigs are a classic HMRC audit trigger.
Real-Time Reporting for Property Disposals
Picture this: you’ve just sold a buy-to-let in Cardiff, and the clock’s ticking. Since 2020, UK residents selling residential property must report and pay CGT within 60 days of completion via HMRC’s online Capital Gains Tax on Property service. You’ll need a Government Gateway account – set one up at www.gov.uk/log-in-register-hmrc-online-services. This catches second homes, rentals, or inherited properties not covered by Private Residence Relief.
Here’s how it works in practice: Jane, a self-employed designer from Birmingham, sold her late father’s flat in July 2025. Her gain was £20,000 after costs. She logged into her personal tax account, submitted a real-time return by September, and paid £3,240 (18% on £18,000 post-AEA, as a basic-rate taxpayer). She later adjusted this in her 2025/26 Self Assessment to reflect losses carried forward, avoiding double-reporting. The key? Keeping sale contracts and expense receipts handy – missing these cost one client £500 in overstated gains.
● Steps for Real-Time Reporting:
1. Log into your HMRC account or create one.
2. Complete the online CGT return, detailing proceeds, costs, and reliefs.
3. Calculate tax due, using current rates (18% or 24% for property).
4. Pay via bank transfer or card within 60 days.
5. Retain confirmation and reference number for Self Assessment.
Self Assessment for Other Gains
For non-property gains – shares, crypto, or business assets – or if you’re already in Self Assessment, report via your annual tax return, due by 31 January 2027 for 2025/26. Register by 5 October 2026 if new to it, at www.gov.uk/register-for-self-assessment. This catches self-employed folks with business disposals, employees with stock options, or anyone with complex gains. A Bristol entrepreneur I advised sold his startup shares in 2025, qualifying for Business Asset Disposal Relief at 14%, but nearly missed registering because he assumed his accountant handled it. Always double-check.
Be careful here, because I’ve seen clients trip up when combining property and non-property gains. Report property real-time, then include all gains in Self Assessment to reconcile payments. Overpay early? You can claim a refund later. Underpay? Interest at 7.75% (as of August 2025) stings, plus penalties up to 30% for late filing.
Handling Multiple Income Sources and Tax Codes
Now, let’s think about your situation – if you’re juggling PAYE, dividends, and a side hustle, CGT can complicate things. Your tax code, like 1257L for the £12,570 personal allowance, doesn’t factor in gains, but high gains can push you into higher income tax bands, affecting CGT rates. A Londoner I worked with, Priya, had a £40,000 salary and £15,000 share gain, pushing her into the 24% CGT bracket despite a 1257L code. She checked her personal tax account mid-year, spotting the mismatch before overpaying.
For self-employed or business owners, expenses like equipment upgrades can offset business gains, but only if properly documented. One sole trader client claimed £10,000 in refurb costs on a sold workshop, slashing his gain, but HMRC queried it for lack of receipts – a lesson in keeping records. Scottish taxpayers, note: your higher income tax bands (e.g., 42% over £43,662) don’t alter CGT, but misjudging income can inflate your bill.
Common Errors and How to Avoid Them
None of us loves tax surprises, but here’s how to sidestep pitfalls. Underreporting gains – especially crypto or side hustle shares – is a red flag. HMRC’s data-sharing with platforms like Coinbase catches these fast. Another trap? Forgetting to claim reliefs like BADR or losses. A Manchester landlord I advised missed £20,000 in Lettings Relief by not declaring shared occupancy, costing £4,800 extra.
Use this checklist to stay on track:
● Verify disposal dates and values with contracts or broker statements.
● Double-check relief eligibility (e.g., BADR requires two-year ownership).
● Report losses within four years, even if no tax due.
● Cross-reference income sources to confirm your CGT rate band.
● Keep records for six years – HMRC can audit back that far.
Rare Scenarios: Emergency Sales and Overpayments
Ever faced a forced sale, like a business asset due to insolvency? Holdover relief can defer gains if reinvested, but you must claim it explicitly. Or take overpayments: HMRC data shows £1.2bn in CGT refunds issued annually, often from misreported costs or unclaimed reliefs. A Welsh client, Dafydd, overpaid £2,000 on a share sale by forgetting improvement costs – a quick amendment via Self Assessment fixed it, but only because he kept detailed records.
High-income child benefit charges can also sneak in if gains push income over £50,000, triggering clawbacks. Check your personal tax account to spot these overlaps early. For business owners, IR35 changes since 2021 mean contractors must scrutinise deemed payments as income, which can bump CGT rates if not separated.
Tools and Resources for Accuracy
HMRC’s online calculators at www.gov.uk/tax-property help estimate property CGT, but they’re clunky for complex cases. Instead, I’ve guided clients to use spreadsheets tracking:
● Asset purchase/disposal dates and values.
● Allowable expenses (e.g., legal fees, stamp duty).
● Losses carried forward from prior years.
● Reliefs applied, with supporting evidence.
For real-time support, MoneyHelper offers impartial guidance, while LITRG clarifies complex cases like non-domiciled taxpayers. Don’t rely on generic blogs – they often miss nuances like 2025 rate hikes or BADR deadlines.
UK Capital Gains Tax Statistics
Advanced Strategies and Practical Tools for Managing Capital Gains Tax
So, you’ve got the basics of calculating and reporting capital gains tax (CGT) down, but now it’s time to get clever. Over nearly two decades advising UK taxpayers, I’ve seen how strategic planning can shave thousands off tax bills or prevent HMRC headaches. Whether you’re an employee with stock options, a self-employed tradesperson, or a business owner selling up, this part dives into advanced tactics, real-world case studies, and custom tools to keep your CGT in check for 2025/26. Let’s make sure you’re not paying a penny more than necessary.
Can You Reduce Your CGT with Smart Timing?
Timing is everything, and I’ve seen clients save fortunes by planning disposals carefully. Spreading gains over multiple tax years can keep you in the basic-rate band (income up to £37,700 after the £12,570 personal allowance) at 18% rather than tipping into 24% for higher earners. Take Emma, a freelancer from Glasgow, who sold half her crypto portfolio in March 2025 and the rest in April 2025. By splitting the £30,000 gain across two years, she used two £3,000 annual exempt amounts, saving £2,160 in tax.
Business owners can defer gains using rollover relief by reinvesting proceeds into new business assets within 12 months. A Southampton client, Raj, sold a shop for a £50,000 gain and reinvested in new premises, deferring the entire tax bill. But beware: the new asset must qualify (e.g., trading property, not investments), and HMRC checks this closely. For employees, share schemes like EMI can delay CGT until exercise, but check vesting schedules – rushing a sale mid-year might spike your income unnecessarily.
How to Use Spousal Transfers to Double Your Allowance?
None of us loves tax surprises, but here’s a neat trick: transferring assets to your spouse or civil partner is CGT-free, letting you use both £3,000 exemptions. A London couple I advised, Mark and Sophie, sold a rental property with a £40,000 gain. By transferring half to Sophie pre-sale, each claimed £3,000, reducing the taxable gain to £34,000. Since both were basic-rate taxpayers, they paid 18% instead of one hitting 24% due to income stacking. Just ensure the transfer is genuine – HMRC sniffs out sham moves.
For business owners, this works for company shares too, but only if the recipient meets Business Asset Disposal Relief (BADR) criteria (5% ownership, two years active involvement). One pitfall? Scottish or Welsh taxpayers with different income tax bands must still use UK-wide CGT bands, so calculate combined income carefully.
What If You’re a Business Owner Selling Assets?
Business owners, listen up – selling company shares, equipment, or premises can trigger hefty CGT, but reliefs are your lifeline. BADR slashes the rate to 14% on up to £1m lifetime gains for qualifying trades, but the 2026/27 hike to 18% is looming. A Bristol café owner I worked with, Liam, sold his business in 2025 for a £200,000 gain. By proving two years’ active trading, he paid £28,000 at 14% instead of £48,000 at 24% – a massive win.
Be careful here, because I’ve seen clients trip up when assuming all assets qualify.
Goodwill, trademarks, or leased equipment might not, and HMRC’s tightened rules post-2024 mean stricter checks. For contractors under IR35, deemed payments count as income, potentially pushing gains into higher bands. Always cross-check with sale agreements and HMRC’s BADR guidance.
Spotting and Fixing Overpayments or Underpayments
Picture this: you’re staring at your Self Assessment and realise you’ve overpaid CGT. It happens – HMRC’s 2024/25 data shows £1.2bn in refunds, often from unclaimed reliefs or miscalculated costs. A Cardiff landlord, Aisha, overpaid £3,500 by forgetting to deduct £15,000 in property improvements. She amended her return via her personal tax account, recovering the cash within weeks.
Underpayments are riskier – late reporting incurs 7.75% interest and up to 30% penalties. To catch errors, use this worksheet inspired by client audits:
Run this for each asset, then aggregate. It’s saved clients like a Manchester tech founder from missing £10,000 in deductible broker fees.
Rare Cases: Non-Doms, Trusts, and Emergency Sales
Non-domiciled residents face CGT only on UK assets or remitted gains, but 2025 reforms tightened rules – check HMRC’s non-dom guidance. Trusts pay 24% flat, and personal representatives get no AEA for the first two years post-death, a trap that cost one estate £6,000 extra. Emergency sales, like forced business disposals, can use holdover relief to defer tax, but you must reinvest in qualifying assets and file a claim.
High-income child benefit charges can also bite if gains push income over £50,000, triggering repayments. A Welsh client, Sian, faced this when her £25,000 share gain bumped her income, costing £1,060 in clawbacks – avoidable by checking HMRC’s calculator.
A Beginner's Guide to CGT Payment Method
Summary of Key Points
CGT applies to profits from selling assets like property, shares, or business interests, but not your main home or ISAs.
○ Use the £3,000 annual exempt amount to reduce taxable gains.
Tax rates for 2025/26 are 18% (basic) or 24% (higher) for most gains, with BADR at 14% for qualifying business sales.
Report property gains within 60 days via HMRC’s online service; other gains go in Self Assessment by 31 January 2027.
Calculate gains accurately: Deduct purchase costs, fees, and improvements; offset losses within four years.
Claim reliefs like Private Residence or BADR to cut your bill, but document eligibility carefully.
Spousal transfers can double exemptions, saving tax by splitting gains across two £3,000 allowances.
Business owners benefit from BADR, but the rate rises to 18% in 2026/27, so consider timing sales.
Check for overpayments using your personal tax account; HMRC refunds £1.2bn annually for errors.
Multiple income sources complicate rates – aggregate salary, dividends, and gains to determine your band.
Keep records for six years and use worksheets to avoid errors like unclaimed costs or reliefs.
FAQs
Q1: Does capital gains tax apply differently if someone lives in Scotland or Wales?
A1: Well, it's worth noting that capital gains tax rates and rules are the same across the whole UK, so Scottish or Welsh residents use the standard bands regardless of their devolved income tax variations. In my experience with clients up north, the mix-up often comes when folks assume higher Scottish income rates push CGT higher too – they don't, but always tally your total income to confirm your band, as gains stack on top.
Q2: How does capital gains tax work for self-employed sole traders selling business assets?
A2: For self-employed sole traders, CGT hits on profits from disposing of business assets like equipment or premises, but you might qualify for Business Asset Disposal Relief at 14% for 2025/26 if you've owned and used them in your trade for at least two years. I've advised traders in the Midlands who overlooked documenting active involvement, leading to full rates instead – keep records of how the asset was used to avoid that pitfall.
Q3: What if capital gains push someone's income into a higher tax bracket?
A3: Gains are added to your other income to figure out the rate, so a big disposal could mean part at 18% and part at 24%, especially if you're near the basic rate limit. Consider a PAYE worker with £35,000 salary selling shares for a £20,000 gain; the excess tips into higher territory, bumping the bill unexpectedly – I've seen this catch out remote workers post-pandemic when bonuses aligned with sales.
Q4: Can business owners claim relief when selling company shares?
A4: Yes, qualifying shares in a personal trading company can get Business Asset Disposal Relief, capping CGT at 14% up to a £1m lifetime limit for 2025/26, provided you've held at least 5% for two years and been involved in management. A small business owner I recall in Kent nearly missed this by not proving 'material interest' – chat with an advisor to verify eligibility before pulling the trigger.
Q5: How is capital gains tax handled for assets in employee share schemes?
A5: In schemes like EMI or SIP, CGT applies when you sell the shares, with the base cost often being the exercise price, but some get Income Tax relief on exercise that rolls into CGT calculations. It's a common mix-up for tech employees I've worked with, forgetting to report transfers to ISAs within limits – track your acquisition costs meticulously to avoid overpaying on later disposals.
Q6: What happens to capital gains tax if someone is temporarily non-resident?
A6: If you've been non-UK resident for less than five years and return, gains made abroad during that time become taxable in your return year, including any losses allowable then. One client who popped over to Europe for a short stint came back to a nasty surprise on unreported foreign shares – the rules aim to prevent avoidance, so declare everything upon re-residence to sidestep penalties.
Q7: Are there special capital gains tax rules for trusts or estates?
A7: Trustees pay a flat 24% on gains above a £1,500 annual exempt amount for 2025/26, with no basic rate band, and personal representatives handle deceased's assets similarly but without the exemption in the first two years. I've guided executors through this maze, where forgetting to offset trust losses against gains led to unnecessary tax – always review the trust deed for allowable expenses like valuation fees.
Q8: Does capital gains tax apply to cryptocurrency disposals for gig economy workers?
A8: Absolutely, selling or swapping crypto counts as a disposal, with gains taxed after the £3,000 exemption, and gig workers with side crypto trades must aggregate them with other sources. A freelancer in Leeds I knew underreported frequent small trades as 'hobby' losses, triggering an HMRC query – treat it like shares, logging every transaction to claim offsets properly.
Q9: Can someone transfer assets to family to reduce capital gains tax?
A9: Transfers to spouses or civil partners are CGT-free, effectively doubling exemptions, but gifts to others trigger a disposal at market value, potentially with holdover relief for business assets. In practice, parents gifting shares to kids often forget the deemed disposal, as one family I advised did, leading to immediate tax – structure via wills or trusts for smoother inheritance without the hit.
Q10: What if capital gains tax was underpaid due to multiple jobs?
A10: HMRC can chase underpayments up to six years back, with interest and penalties if careless, but voluntary disclosure via your tax account often reduces fines. An employee with freelance gigs I helped had unreported share gains from a side job, discovered via P11D mismatches – reconcile all income sources annually to spot and amend errors before they escalate.
Q11: How does remote work affect capital gains tax on UK assets?
A11: Remote work doesn't change CGT liability if you're UK resident – worldwide gains are taxable, but non-residents only on UK property. Post-2025, with more hybrid setups, clients who've relocated briefly abroad sometimes assume exemption, but temporary status pulls gains back in – confirm your residence test via days spent in the UK to avoid surprises on home office equipment sales.
Q12: Are there capital gains tax implications for high earners with child benefit?
A12: If gains push your adjusted net income over £50,000, you might repay child benefit at 1% per £200 excess, up to 100% clawback. A higher earner I advised faced this when property gains tipped the scale, turning a windfall into a double whammy – use HMRC's calculator to model scenarios and consider deferring disposals if benefits are in play.
Q13: What reliefs apply for business owners selling to employee trusts?
A13: Selling to an Employee Ownership Trust can qualify for BADR at 14%, plus extra reliefs like no Inheritance Tax on the transfer if conditions met, fostering succession. Shop owners in Birmingham I've seen use this to retire tax-efficiently, but strict employee beneficiary rules apply – ensure the trust covers all staff to claim the full benefits without HMRC challenges.
Q14: How to check if capital gains tax relief was applied correctly?
A14: Review your Self Assessment or real-time return against disposal docs, ensuring reliefs like Private Residence match occupancy evidence; mismatches often stem from partial lettings. One investor client spotted an error in Lettings Relief cap via a simple timeline check, reclaiming overpaid tax – keep a disposal log with photos or utility bills for proof.
Q15: Does capital gains tax interact with pension contributions?
A15: Gains themselves don't directly offset pensions, but using proceeds to boost contributions can shelter future income via tax relief, indirectly easing overall liability. Self-employed clients I've guided often reinvest sale gains into SIPPs for 45% relief if higher rate taxpayers – time it right to avoid using up your £60,000 annual allowance prematurely.
Q16: What if a business asset is destroyed or compulsorily acquired?
A16: Compensation counts as a disposal, but rollover relief lets you defer CGT by reinvesting in similar assets within a year. A manufacturer I worked with after a factory fire used this to buy replacements tax-free, but missed the insurance deductions initially – claim losses if no reinvestment, and document valuations to support the deferral.
Q17: Are carried interest gains taxed differently under capital gains tax?
A17: From April 2025, carried interest faces a flat 32% CGT rate, regardless of your band, targeting private equity pros. Investment managers I've advised scramble with transitional rules, where elections affect timing – if you're in funds, separate these from standard gains to apply the right rate and avoid blending errors.
Q18: How does capital gains tax apply to foreign assets for UK residents?
A18: UK residents pay on worldwide gains, but from April 2025, new residents might claim temporary relief under the foreign income regime if unremitted. Expats returning with overseas property sales often trip on remittance basis changes, as one did by bringing funds home unwittingly – elect carefully if eligible, or face full taxation.
Q19: Can losses from one year offset capital gains in another for PAYE employees?
A19: Yes, carry forward unused losses indefinitely against future gains, but report them within four years even if no tax due. An employee with stock losses from a startup flop I helped offset against later property gains, saving thousands – prioritise offsetting against highest-rate gains first for max efficiency in your planning.
Q20: What are the penalties for late capital gains tax payments?
A20: Late payment draws 7.75% interest plus penalties up to 5% initially and daily thereafter, escalating for deliberate errors. Business owners delaying on asset sales I've seen rack up fees quickly, but 'time to pay' arrangements ease this if cashflow's tight – contact HMRC early to negotiate and halt the accrual before it bites harder.
About the Author
Maz Zaheer, AFA, MAAT, MBA, is the CEO and Chief Accountant of MTA and Total Tax Accountants, two premier UK tax advisory firms. With over 15 years of expertise in UK taxation, Maz provides authoritative guidance to individuals, SMEs, and corporations on complex tax issues. As a Tax Accountant and an accomplished tax writer, he is renowned for breaking down intricate tax concepts into clear, accessible content. His insights equip UK taxpayers with the knowledge and confidence to manage their financial obligations effectively.
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