Capital gains

If you sell, give away, exchange or otherwise cease to own an asset or part of an asset which has increased in value, you may have to pay capital gains tax (CGT) on the 'gain' or profit. For example, if you sell an asset for more than you paid for it, or if an asset is damaged and you receive compensation.

On the other hand, you do not have to pay CGT when you dispose of personal belongings worth £6,000 or less; your car; ISAs, PEPs and UK Government gilts; betting, lottery or pools winnings; income subject to income tax; or, in most cases, your main home.

There are also two different rates of CGT for 2008-2009, for individuals, trustees and personal representatives: a lower rate of 10% applied to lifetime gains of up to £1 million on the sale of business assets, and a second rate of 18% applied to all other gains.

So your CGT position may not be easy to calculate. At Booth Ainsworth, our Private Client team can take a look at your assets and advise you on which of them will attract CGT and what rate they are assessed at, so you can plan accordingly.