If you’re thinking of selling any assets for a profit, the next month could be the best time for tax purposes.
Assets can include investments, rental properties, cars, or anything else that you own personally.
Profits on the sale of assets are subject to Capital Gains Tax (CGT), but each year you get a tax-free allowance for CGT that is separate to any other tax-free allowance you receive. For 2012/13, the CGT allowance is £10,600.
Therefore, if you’re thinking of selling an asset for a profit, you should consider the timing of the sale to make sure you use this year’s allowance, as you’ll get a new allowance from 6 April.
This is particularly important if you are thinking of selling a few assets, or a large investment. For example, if you sell shares at a profit of £20,000 in one sale, you’ll be taxed on a profit of £9,400 (ie £20,000 less the CGT allowance). However, if you make a profit of £10,000 on 5 April and another profit of £10,000 on 6 April, it would all be tax free!
You should also consider whether you can transfer any of your property to a spouse or civil partner to split the profits and use their CGT allowance as well.
Would you like to know more?
Of course, you should take detailed advice before making any final decision. If you would like to speak to us about this, please contact us on 0845 177 5007 or by email at [email protected] Alternatively, you can use the MJF Accountancy contact form.
For more tax tips and ideas to boost your profits, please sign up for our newsletter.