Minimise the amount of Capital Gains Tax with these tax busting tips:
1. Transferring Assets
If you are married or in a civil partnership, you should consider transferring assets into joint names. By doing this, you and your spouse or partner can both make use of your tax-free allowance of up to £23,400 (£11,700 each for tax year 2018/19).
2. Invest in Antiques
Investing in paintings, antiques and other collectibles can be tax-efficient. If you sell all or part of a set to the same person, you would get the £6,000 personal possession exemption, however if you sell parts of a set to different people, each item sold would qualify for the £6,000 exemption.
If you are selling a set of jewellery but sold the necklace to one person and the pair of earrnings to another person, you will get the £6,000 exemption on the necklace and further £6,000 for the pair of earrings you sold. However, if you sold the jewellery set to the same person, you will only get £6,000 exemption for the whole set.
3. Unmarried Partners
If you and your partner are still unmarried, you can each nominate a different property as your main home. Therefore, you can each benefit from the tax relief available. On the other hand, married couples and civil partners can only choose one property as their main home.
4. Live in the property before selling
If it’s possible, you should live in a property before letting it out. If your property is your main home for a certain period before you sell it, you can potentially reduce your Capital Gains Tax bill when you eventually sell it.
5. Save-As-You-Earn Share Option Scheme
If you immediately sell employee shares that you get through save-as-you-earn share option scheme, company share option scheme or enterprise management incentive scheme, you may have a Capital Gains Tax bill. To reduce your Capital Gains Tax bill, you should consider selling several tranches so that each year’s gain is within your annual tax-free allowance of £11,700 for 2018/19.
6. Transfer Save-As-You-Earn Shares to ISA
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. When you eventually sell, your gains will then be tax-free.