Everyone does however receive an annual exemption, for both 2009/10 and 2010/11 this is £10,100 which saves you £1,800 in Capital Gains Tax.

If the asset is worth less and you make a loss, then this loss may reduce any CGT you have to pay on sales of other assets. You are liable to pay tax on the total capital gains arising on disposals you make in any one tax year should they exceed the annual exemption limit

You will not pay Capital Gains Tax (CGT) on the whole of your gain from the disposal of an asset as everyone is given an annual allowance or exemption against any CGT. For tax years 2009/10 and 2010/11 this exemption is £10,100. The CGT exemption means you can take the first £10,100 of any CGT calculated without paying any tax on it.

Should you notify HMRC about any gains or losses you have made, provided your total gains for the tax year do not exceed your annual CGT allowance then you may not need to disclose the gain to HMRC. However, you will need to let HMRC know about any gain you make if the total proceeds from the sale of assets is more than 4 times the annual exemption, £10,100 x 4 = £40,400.

You should also notify HMRC to record any losses you have made failure to do so could mean you will not be able to use the losses against any gains you make in the future.

How to calculate CGT, in simplistic terms you take the amount you paid for an asset away from the proceeds received when you sell it, you then are left either with a Capital Gain or a Capital Loss.

Can I use any losses against future gains, yes you can, you must deduct the losses first from any gain before applying your annual CGT exemption. For example, Sam had losses from  previous years of £2000, they made a gain in 2009/10 of £10,000. To calculate any taxable gain Sam must firstly deduct the brought forward losses of £2000 from the gain of £10,000, they then use £8000 of their annual CGT exemption to reduce the taxable gain to nil. The unused exemption of £2,100 cannot be carried forward and therefore is lost.

You should always seek expert advice before disposing of an asset to ensure you are using all available allowances and exemptions. Tax Advantage offer expert advice on Capital Gains Tax, please complete our contacting form with a brief description of what you are disposing of and one of our team will get back to you.

Use Tax Advantage for Disclosing your Capital Gains

Tax Advantage offers:

• Advice on Capital Gains.
• Ensure you use all available allowances and exemptions
• Fast efficient service

Tax Advantage will calculate exactly how much Capital Gains/Losses you have. Once your Tax Return has been approved by you we will submit the form to HMRC advising you of how much to pay and when to pay it.

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