Capital Gains Tax could be as high as 28 percent – can you cut your bill? | Personal Finance | Finance

Basic rate taxpayers currently pay Capital Gains Tax (CGT) at a rate of 10 percent on investments and 18 percent on property, but higher-rate taxpayers could see as much as 28 percent tax bills. Brewin Dolphin has shared seven simple steps Britons can take to lower their CGT liability and keep money in their pockets.

Exemptions

Like inheritance tax, many people forget that there are allowances and exemptions for each person which will be tax-free.

The CGT annual exemption allows people to make gains up to £12,300 without a tax bill but this amount cannot be carried forward into the next tax year. This is why it’s vital to utilise the annual exemption as much as possible. 

Use losses

No one wants to be making losses, but offsetting any gains against losses will reduce the CGT bill. 

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The gains and losses must have been in the same tax year in order to offset each other. 

Additionally, any losses that go unused can be carried forward so long as they are reported to HMRC within four years. 

Transfers to spouse

Similar to inheritance tax allowances, CGT allows transfers between spouses and civil partners to be done tax free. 

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Charitable donations

Donations of land, property and qualifying shares to a charity provides income tax and CGT relief. 

Gift hold 

Giving or selling certain assets for less than their value in order to help the buyer can help eligible Britons avoid CGT on this transaction. 

There are some other eligibility conditions, and as a result, Brewin Dolphin recommended Britons speak to a professional adviser if they are unsure about their position.