How much of your gain are you getting?

 With increased capital gains tax rates and a maximum of 28% payable on gains, do you know how much you are actually going to get when you make a capital gains disposal?  With potential tax rates of 10%, 18% and 28% for 2010/2011 and tight rules for Entrepreneurs Relief there are several areas you can work on to increase the amount of cash that you receive after the capital gains tax payable.

By reviewing your assets before their disposal, you may be able to maximise the amount of Entrepreneurs Relief available on each disposal.  With a maximum saving available of £900,000 being proactive could save you thousands of pounds.  You can also consider the timings of disposals to ensure that you match losses available with gains and to ensure that you make all claims available to you.

You can also make negligible value claims for shareholding, which have become virtually worthless, reducing the tax payable on other gains that you have made in the year and saving you money.

It is also worth considering who owns the assets before the sale; if at all possible ownership should be split between husband and wife to ensure that both annual exemptions of £10,100 (2010/2011) are used and that the lower rates of capital gains tax are utilised by the spouse with the lower income.

The transfer of asset shares between husband and wife cam be made free of Capital Gains Tax or Inheritance Tax so should be considered before the disposal of assets to reduce the tax payable as much as possible.  Care should be taken not to  jeopardise more generous reliefs in the transfer.

Extract taken from our 2011 Bonus edition Tax newsletter – if you would like to subscribe please leave your details here.

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