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How can you reduce your capital gains tax bill in 2018/19?
Whether you’re a buy-to-let landlord, a shareholder, an art dealer or you fall somewhere in between, the chances are you will be familiar with paying capital gains tax (CGT).
CGT is payable when you ‘dispose’ of a certain item and make money from the sale, with the amount you’re liable for depending on your income and the asset in question.
These could be personal items worth more than £6,000, a second home or even shares you own in a limited company.
CGT is due when you sell or give these assets away, classed as ‘disposing’ of an asset in the eyes of HMRC.
For example, you buy a house for £170,000 with the intention of letting it out to tenants and manage to sell it for £210,000 three years later.
This will leave you with £40,000 of profit before deducting the annual exemption, which is potentially liable for CGT.
However, it’s possible to reduce your tax bill through careful CGT planning and there are several reliefs out there to help you and your business form a tax-eficient strategy in 2018/19.
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