If you have made capital gains within the last tax year (6 April 2020 – 5 April 2021) and you are not already registered for self-assessment, you must register on or before 5 October 2021.
What is capital gains tax?
Capital gains tax (CGT) is levied on the portion of profit (capital gain) you receive from the disposal of an asset that has increased in value. It is the profit that is taxed, not the whole amount you receive.
For example, if you bought a painting for £10,000 and later sold it for £18,000 the gain would be £8,000. The £8,000 is the amount subject to capital gains tax.
Each tax year individuals get an annual allowance, for the 2021/22 tax year the annual allowance is £12,300. Anything over this amount will be taxed at a rate of either 10% or 20% (18% or 28% for property) depending on your income tax rate.
To report your gains on a self-assessment tax return, you must first register for self-assessment which can be done via gov.uk
What you will need
If you have not filed online before, you will need to complete the following steps:
- Register using form SA1
- Once you have registered, you’ll be given a Unique Taxpayer Reference (UTR) number. This will arrive in the post within 10 working days or 21 days if you are abroad
- Create your online account
- Sign up for Self-Assessment online (you will need your UTR number to do this)
If you require assistance submitting your self-assessment tax return, feel free to contact us.
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