Self-Assessment tax returns need to include capital gains tax (CGT) declarations if the asset was sold for more than four times the allowance. But
Self-Assessment tax returns need to include capital gains tax (CGT) declarations if the asset was sold for more than four times the allowance. But what counts as an asset in the case of CGT?
CGT is in essence a tax that is paid on anything that has been sold for a profit or increased in value whilst in one’s possession.
There are a variety of ways to report and pay CGT, including declaring it on a self assessment tax return.
The deadline for these returns is generally January 31, however, earlier this month HMRC announced that while the deadline itself will stay in place, penalties will be waived.
This is to help accommodate those who are unable to meet the January deadline by voiding any additional costs they may incur by filing their return later.
Self-Assessment tax returns filed before February 1 and tax payments or Time to Pay arrangements made before April 1 will not incur any penalty fees.
However, there will still be 2.75 percent interest accumulated on payments not made by January 31.
With all of this in mind, it is vital that Britons understand which assets and profits make them liable for CGT in hopes that they can stick to the deadline as much as possible and avoid accidentally incriminating themselves.
People who fail to declare CGT on assets they have sold will be liable for a penalty fine and interest owed on the payment if it is made after the deadline.
CGT is also chargeable on all coins that are not recognised as a UK legal tender, such as gold, silver or platinum coins as well as gold and silver bullion bars.
As precious metals have a variable price, consistently increasing and decreasing, investors will only need to pay CGT on sales with a total gain more than the tax free allowance.
Investors do not need to pay CGT on Premium Bonds and Qualifying Corporate Bonds as these are exempt.
Additionally, investors do not need to pay CGT on:
- Shares in an ISA or PEP
- Shares in employer share incentive plans
- UK government gilts
- Employee shareholder shares.