Capital Gains Tax Advice for Yorkshire Individuals and Businesses

CGT Planning That Starts Before the Disposal

Capital Gains Tax (CGT) is charged on the profit made when you sell, give away or otherwise dispose of an asset that has increased in value. It applies to a wide range of assets — residential and commercial property, business shares, investments, land and certain personal possessions — and the rates and rules that apply depend on the type of asset, your income tax position, and whether any reliefs are available.

The most important point about CGT is timing. Many CGT planning opportunities must be acted on before a disposal takes place, not after. Once an asset has been sold, the options for reducing the tax are significantly limited. We advise individuals and businesses across Yorkshire on CGT planning, compliance and reporting — from straightforward second property sales to complex business disposals and multi-asset planning.

CGT rates increased significantly in the October 2024 Budget, making proactive planning more important than it has been for many years.

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Residential property (other than your main home)

18% for basic rate taxpayers, 24% for higher and additional rate taxpayers. These rates apply to gains on buy-to-let properties, second homes and inherited residential property

Other assets (shares, business assets, investments, commercial property)

18% for basic rate taxpayers, 24% for higher and additional rate taxpayers from 30 October 2024. This increased from 10%/20% — a significant change that affects business disposals and investment portfolios

Business Asset Disposal Relief (BADR)

14% from 6 April 2025 on qualifying gains up to the £1 million lifetime limit (increased from 10%). Rising to 18% from 6 April 2026

Annual Exempt Amount

£3,000 for individuals in 2024-25 and 2025-26. This was reduced from £12,300 in 2022-23 to £6,000 in 2023-24 and then to £3,000 in 2024-25

Why Clients Come to Us for CGT Advice

CGT situations come to us in a variety of contexts. Common triggers include:

Selling a buy-to-let or second property and needing to understand the CGT due and the 60-day reporting and payment deadline
Selling a business or shares in a company and wanting to understand BADR eligibility and the tax position before contracts are exchanged
Planning to give assets to children or other family members and needing to understand the CGT and IHT implications of the gift
Selling an investment portfolio or significant shareholding and wanting to plan the timing and use of allowances to minimise the overall tax
Receiving shares or options through an employee share scheme and needing to understand when CGT arises and how it is calculated
Selling commercial property or development land and needing advice on rollover relief or other available reliefs
Dealing with the estate of a deceased person and needing to understand the CGT position on assets that are to be sold or transferred
An HMRC enquiry into a previously reported or unreported gain

The earlier in the process we are involved, the more options are typically available.

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CGT Planning Before Disposal

The most valuable CGT advice happens before the disposal, not after. Pre-disposal planning can include: timing the disposal to use the annual exempt amount in the most efficient tax year; spreading disposals across tax years where there are multiple assets; transferring assets between spouses or civil partners before disposal to use both annual exempt amounts and potentially a lower rate; considering whether any available reliefs apply and how to structure the disposal to preserve them; and planning the interaction with income tax — particularly for gains that are close to the higher rate threshold.

We advise on all of these as part of CGT planning work. The key is to have the conversation before contracts are exchanged, not after.

Property CGT — Including the 60-Day Reporting Rule

CGT on residential property — including buy-to-let properties, second homes and inherited residential property — must be reported and paid within 60 days of completion of the sale. This applies even if you file a self-assessment tax return. Missing the 60-day deadline results in automatic penalties and interest.

The 60-day deadline is one of the most commonly missed CGT obligations in the UK. Many people are unaware of it, or assume it will be dealt with through their annual self-assessment return. It will not — it must be reported separately via HMRC’s online service.

Key CGT reliefs relevant to property include:

Private Residence Relief (PRR) — exempts the gain on your main home from CGT. The relief applies for the period the property was your main residence, plus the final nine months of ownership in all cases (extended to 36 months in certain circumstances). If a property has been both your main home and let, PRR applies to the proportion of the gain attributable to the period of main residence
Letting relief — previously available to landlords who had at some point lived in the property as their main home. Since April 2020, letting relief is only available where the owner is in shared occupancy with the tenant — it is no longer widely available
Principal Private Residence election — where you own more than one property, you can elect which is your main residence for PPR purposes. The election must be made within two years of acquiring a second property. This is a time-sensitive planning opportunity that is frequently missed

We advise on property CGT, prepare the 60-day return where required, and review the PRR position for properties that have had mixed use as a home and as a let.

Business Asset Disposal Relief (BADR)

Business Asset Disposal Relief reduces the CGT rate on qualifying business disposals. From 6 April 2025 the rate is 14%, rising to 18% from 6 April 2026. The lifetime limit is £1 million of qualifying gains.

BADR is available on disposals of:

Shares in a personal company — where the individual has held at least 5% of the ordinary share capital and voting rights, and has been an officer or employee of the company, for at least two years ending on the date of disposal (or the date the company ceased trading)
The whole or part of a business — for sole traders and partnerships disposing of all or part of a business that has been owned and actively carried on for at least two years
Assets used in a business — where assets are sold following the cessation of a business, provided the business was carried on for at least two years and the asset was used in the business throughout

The qualifying conditions need to be met at the date of disposal. There are circumstances where BADR can be inadvertently lost — for example, through dilution of shareholding below 5% in a funding round, or through the issue of new share classes that affect the voting rights test. We check BADR eligibility carefully as a standard part of pre-sale planning and advise on any steps needed to preserve it.

The planned increase in the BADR rate to 18% from April 2026 means that completing qualifying disposals before that date at 14% may be significantly more tax-efficient for some sellers.

Investment and Share Disposal CGT

CGT on the disposal of shares, investment portfolios and other financial assets is calculated on the gain since acquisition, after deducting allowable costs. Key planning points include: using the annual exempt amount (£3,000) each year; bed-and-spouse or bed-and-ISA transactions to reset base costs; loss harvesting to offset gains; and the timing of disposals relative to the tax year end.

For individuals holding shares in their employer or former employer, the CGT position often overlaps with employment-related securities rules and potentially Enterprise Management Incentives (EMI) or other share scheme arrangements, each of which has its own tax treatment. We advise on the full CGT position for share disposals, taking into account all of these factors.

The share matching rules — which determine which shares are treated as disposed of where a portfolio has been built up over time — need to be applied correctly to calculate the gain accurately. We prepare the calculation and report it correctly on the self-assessment return.

Gift Holdover Relief

Gift holdover relief allows the gain on a gift of certain assets to be deferred — the donor does not pay CGT immediately, but the gain is effectively passed to the recipient, who takes on the asset at the donor’s base cost. The recipient then pays CGT on the full gain (including the deferred gain) when they eventually dispose of the asset.

Holdover relief is available on gifts of business assets (including shares in trading companies), on gifts of assets that would qualify for inheritance tax business property relief, and on gifts into and out of certain trusts. It is not available on gifts of investment properties or other non-business assets to individuals.

Holdover relief interacts with IHT gifting strategies and the two need to be considered together — what is efficient for CGT purposes is not always efficient for IHT, and vice versa.

Rollover Relief

Business asset rollover relief allows a business to defer the CGT on the sale of a qualifying business asset by reinvesting the proceeds in a replacement asset. The gain is rolled into the base cost of the new asset and is only triggered when the replacement asset is eventually sold (unless rollover relief is claimed again).

Rollover relief applies to assets used in a trade, including land and buildings, fixed plant and machinery. The replacement asset must be purchased within one year before and three years after the disposal of the old asset. We advise on rollover relief eligibility and the timing of replacements to ensure the relief is properly claimed.

CGT and Inheritance Tax — The Interaction

CGT and IHT interact in ways that are frequently misunderstood, and planning one without considering the other can lead to poor outcomes. Key interaction points include:

Gifts to individuals — a gift is a disposal for CGT purposes at market value, even though no money changes hands. If holdover relief is not available, CGT is due. The gift may also be a potentially exempt transfer for IHT, starting the seven-year clock. The tax implications of the gift need to be assessed for both taxes simultaneously
Death — assets passing on death are exempt from CGT — the recipient takes the asset at the probate value (market value at date of death) as their base cost. This means unrealised gains are wiped out on death. However, the estate may be subject to IHT on those same assets. For assets with large unrealised gains, holding until death can eliminate the CGT but may increase IHT
Business assets — assets qualifying for Business Property Relief (BPR) or Agricultural Property Relief (APR) may be exempt from IHT. But these same assets may also attract holdover or rollover relief for CGT, and BADR on disposal. The interaction of all three needs to be considered in business succession planning

We advise on CGT and IHT together where the two interact — which is in most gifting, succession and estate planning situations.

How Can I Get Started with Your Capital Gains Tax (CGT) Advisory Services?

To get started, simply contact our team to schedule a consultation. We’ll assess your CGT needs, discuss your asset portfolio, and tailor a tax solution to minimise your CGT liabilities and optimise your financial position.

What Is the Annual Exempt Amount for Capital Gains Tax (CGT)?

The annual exempt amount is the threshold below which CGT is not payable. Our team can help you understand the current annual exempt amount and optimise your asset disposals to make the most of this allowance.

How Do I Qualify for Business Asset Disposal Relief (BADR) on Capital Gains Tax (CGT)?

BADR is available to individuals disposing of qualifying business assets. Our advisors can assess your eligibility, advise on meeting BADR criteria, and help you claim BADR to benefit from reduced CGT rates on qualifying disposals.

Can You Help Me Calculate Capital Gains Tax (CGT) Liabilities?

Yes, our advisors can assist in calculating CGT liabilities on asset disposals, considering factors such as acquisition cost, sale proceeds, allowable expenses, and applicable reliefs. We ensure accurate CGT calculations and compliance with HMRC regulations.

What Documentation Do I Need for Capital Gains Tax (CGT) Reporting?

Documentation requirements may include purchase invoices, sale contracts, valuation reports, and any relevant expense receipts or documentation. Our team assists in gathering and organising the necessary documentation for CGT reporting.

How Can I Minimise Capital Gains Tax (CGT) Liabilities?

Our tax advisors offer strategic planning services to minimise CGT liabilities legally, including timing asset disposals, utilising exemptions and reliefs, and structuring transactions tax-efficiently.

Are There Any Exemptions or Reliefs Available for Capital Gains Tax (CGT)?

Yes, there are various exemptions, reliefs, and allowances available to mitigate CGT liabilities, such as the Annual Exempt Amount (AEA), Business Asset Disposal Relief (BADR) Private Residence Relief (PRR), and others. Our advisors can assess your eligibility and help you.

How Is Capital Gains Tax Calculated?

CGT is calculated based on the difference between the sale proceeds (or market value) of the asset and its original purchase price (or acquisition cost), adjusted for any allowable expenses and capital improvements.

What Assets Are Subject to Capital Gains Tax (CGT)?

Assets subject to CGT include property, stocks, shares, investments, business assets, and certain personal possessions. Our advisors can help you understand CGT rules for different asset types.

What Is Capital Gains Tax (CGT) and When Does It Apply?

CGT is a tax imposed on the profit or gain realised from the sale, disposal or gift of certain assets, such as property, investments, or business assets. It applies when you sell or dispose of an asset for more than you paid for it.