How to work out your Capital Gains Tax on disposals the simple way and then make a report on your Self Assessment form and pay the tax bill to HMRC.
CGT is due if the amount of all your profits and other taxable income, excluding any exemptions, is higher than your personal yearly tax-free Capital Gains Tax allowance - called your annual exempt amount.
There are three basic steps for working out your total taxable gains.
You must report and pay Capital Gains Tax if your taxable profits, minus your personal tax allowance, is a positive value.
Capital Gains Tax is not payable in cases where the net taxable gain is an amount less than your personal tax-free allowance. There are exceptions to these rules. You still need to inform Her Majesty's Revenue and Customs if;
Note: Write to HMRC if you are not registered for a Self Assessment tax return and other rules apply if you need to report a loss.
If you currently do not fill in a Self Assessment form and are not registered, then it is unnecessary to do anything at all. However, if you are using Self Assessment tax return forms you still need to complete the Capital Gains section by following these three steps.
As a non-resident you do not need to pay tax on most types of Capital Gains but you must make a report if you sell (dispose of) your residential property. This rule also applies even if you make a loss or the gain is below your annual tax-free allowance.
You need to report your payable Capital Gains Tax on your Self Assessment tax return form. Non-residents must contact HM Revenue and Customs within 30 days of selling a UK residential property, even in circumstances where there is no taxable payment due or liable.
If you do not normally complete a tax return but have sold (disposed of) chargeable asset(s) you must register for Self Assessment by the 5th of October following the relevant tax year of the sale. A reminder letter is sent out to those who are registered for Self Assessment. Contact HMRC if you do not receive a reminder letter.
Note: If you submit your tax return electronically, it must be done by the 31st of January and the deadline is the 30th of October for paper forms.
For each Capital Gain (profit) or loss that you report, it is required for you to include your calculations. You must also keep records about the costs and the proceeds for each asset. If you are entitled to any reliefs or other exceptions, you need to include these details too.
Note: You can get further help working out your Capital Gains Tax rate or submitting a tax return from a tax adviser or an accountant.
After You Send Your Tax Return
HM Revenue and Customs will inform you if you are entitled to a refund or any time you owe tax for the year you have declared. You must settle your tax bill by the given deadline.
There are penalties for those who;
Working Out Your Capital Gains Tax then Report and Pay CGT; UK Rules Updated 2017