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Reduce Your Capital Gains Taxes on the Sale of Property

Trying to save money?

With the present state of the economy as it is, people all over the UK are trying to save money every which way they can. From electricity bills to fuel costs, keeping expenses down is on the minds of everyone. In such a scenario, taxes are also an expense that people are having trouble with.

While they do realize that paying them is important for gaining crucial services like healthcare and education, they don’t want to be paying anything extra than they absolutely have to. Even the government allows taxpayers the chance to save up on taxes by offering them tax rebate options.

What is Capital Gains Tax?

Capital gains tax is the tax that is applied on the gain that is made when a property or asset is sold. The tax is charged only on the profit that you make during the sale of the property and not on the actual amount that you receive. For instance, if a property that was worth £250,000 was sold for £300,000 then the capital gains tax would be charged on the profit of £50,000 that you have made in disposing of the property.

There is a threshold amount for the charging of the capital gains tax, though. You won’t be charged any capital gains tax if the profit you make from the sale of a property is less than your tax-free allowance whose amount is fixed at £11,100.

How to Save Up on Capital Gains Tax

The capital gains tax is seen as an unnecessary one by most UK homeowners. Having to pay tax on the profit that they make on selling an asset of theirs seem like a burden to them. However, most of the time the people aren’t aware of the fact that they can save up on capital gains tax and reduce it to a great extent.

They just don’t know that they can save up on this tax by claiming a relief. The following are some of the ways through which you can reduce your capital gains taxes on the sale of property.  

When Jointly Owned Properties Are Sold

One of the instances in which you can save up on capital gains tax is if the gain being made is on the sale of a property that had been jointly owned by you and your partner. In such a scenario, the gain is going to be divided equally among the two of you. So, your gain will be half of the total profit that it made. This means that you will only be responsible for paying capital gains tax on that profit amount only. This is going to considerably reduce the capital gain tax that you have to pay.

 If the Property is Sold to or Given Away as a Gift to Spouse or Partner

Properties that are sold to immediate family members don’t get charged for capital gains tax at all. So, if you are selling your property to your spouse or partner and end up making a gain of more than £11,100 on it then you won’t have to pay any capital gains tax on it. Moreover, you will also not be paying any capital gains tax on any profit made from the sale of a property that you are giving away to your spouse or partner as a gift.

 If the Property is Given Away to Charity

Properties that are given away to charities are also not eligible for charging of capital gains tax. So, you won’t be asked to pay any tax on the profit that you make on the sale of a property that you are giving away to a charity. You might have to pay capital gains tax if you end up making the profit by selling the property to the charity. 

 By Reporting Losses on Sale of Assets

One of the easiest ways of reducing the amount of your capital gains tax is to report the loses that you suffer on the sale of other assets. For instance, if the sale of an asset results in a loss for you then you can get this amount deducted from the profit on which capital gains tax is being charged from you. This will bring down the value of the gain and consequently the amount of the capital gains tax.

 By Getting Tax Help

You can reduce your capital gains tax on the sale of property by getting tax help from professionals too. Go to effective tax to learn about effective tax strategies that will help you in reducing your tax bill.

  

 

Gordon Lowell
Gold Summit Inc.

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