How to avoid capital gains tax

Capital Gains Tax or CGT is the tax due on any gains that are made from the sale of the asset. However it is perfectly possible to reduce your liability to capital gains tax, by using legitimate tax planning strategies. If you own a portfolio of investments such as shares or collective investments, you should consider using your annual Capital Gains Tax exemption.

The exemption allows you to sell an asset and not pay tax on the gains up to the annual threshold.

If you are married it is also possible to gift assets to your spouse and use both Capital Gains Tax (CGT) exemptions.This would allow you to use two amounts of the CGT allowance, further reducing the tax on any possible gains.

For investors that hold property, any gain and possible capital gains tax is potentially a bigger problem. Any CGT planning needs to be carefully considered. We would recommend seeking professional advice before the disposal of any assets.

There are some assets that are exempt from CGT such as your principle private residence. A list of exemptions is available on the Inland Revenues Website.

If you would like to talk to us in more depth about Capital Gains Tax Planning please call us.

There are some aspects of tax planning advice that are not regulated by the Financial Services Authority.