Capital gains tax explained Capital gains tax tips

Key tips for keeping your capital gains tax bill as low as possible

  • Keep receipts and records for all assets on which CGT might eventually be due.
  • Husbands and wives and civil partners each have their own CGT allowance  of £11,100 in 2015-16 (£11,000 in 2014-15). By transferring an asset into your joint names, you can both make use of your tax-free allowance so that up to £22,200 of any gain can be tax-free in 2015-16 (£22,000 in 2014-15). But the transfer to your spouse or partner must be a genuine outright gift.
  • Paintings, antiques and other collectibles can be a tax-efficient investment, especially where they are not treated as a set and so can be sold piece by piece with each item qualifying for the £6,000 exemption. 
  • Unmarried partners can each nominate a different home as their main home to get tax relief on both. (Married couples and civil partners must choose just one.)
  • If you live in a property as your main home for a time before letting it out, you can potentially reduce the CGT bill when you eventually sell it. See Capital gains and property.
  • If you immediately sell employee shares that you get through an Save-As-You-Earn share option scheme, company share option scheme or enterprise management incentive scheme, you may have a CGT bill. Consider selling in several tranches, so that each year’s gain is within your annual tax-free allowance  of £11,100 in 2015-16 (£11,000 in 2014-15). See How capital gains are taxed.
  • If you get shares through a Save-As-You-Earn share option scheme or a share incentive plan, you have 90 days to transfer them tax-free to an Isa or pension. Gains when you eventually sell will then be tax free.

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