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Tax for Individuals – Making best use of your CGT Annual Exempt Amount

Just like for income tax, each individual has an annual exempt amount for capital gains tax purposes. The annual exempt amount is simply the value of gains that they can realise without paying capital gains tax. This amount is generally increased each year in line with inflation. For the tax year 2013/2014, this amount is £10,900.

Therefore, if you decide to sell an asset, it may be worth considering the timing of the sale. For example, if you sell shares in a company, you may decide to sell some in this tax year and some in a later tax year, to get the benefit of two years annual exempt amount. One important note is that if you have a contract for sale, the whole asset will be treated as sold at that date even if you delay the receipt of some of the proceeds.

For more information on capital gains tax planning, contact the tax team on 020 8429 9245.