Whether you’re a buy-to-let landlord, a shareholder, an art dealer or you fall somewhere in between, the chances are you will be familiar with paying capital gains tax (CGT).

CGT is payable when you “dispose” of a certain item and make money from the sale, with the amount you’re liable for depending on your income and the asset in question.

These could be personal items worth more than £6,000, a second home or even shares you own in a limited company.

CGT is due when you sell or give these assets away, classed as “disposing” of an asset in the eyes of HMRC.

For example, you buy a house for £170,000 with the intention of letting it out to tenants and manage to sell it for £210,000 three years later.

This will leave you with £40,000 of profit before deducting the annual exemption, which is potentially liable for CGT.

However, it’s possible to reduce your tax bill through careful CGT planning and there are several reliefs out there to help you and your business form a tax-efficient strategy in 2018/19.

Everybody in the UK sits in a specific income tax band depending on how much they earn in the tax year and it’s these bands that determine how much CGT they pay.

Every taxpayer in the UK is entitled to take advantage of an £11,700 annual CGT exemption, which means you won’t pay any tax on gains worth less than this amount in 2018/19.

The following types of assets are not subject to CGT when you dispose of them:

• moveable possessions worth no more than £6,000

• cars of any value

• government stock (gilts) and savings certificates

• currency for personal use

• debts and most corporate bonds.

If you decide to put your main home up for sale, you usually won’t have any CGT to pay due.

Any assets you give to charity or to a community amateur sports club are free of CGT.

CGT relief can also be offered in relation to investments, losses, entrepreneurs, incorporation, and rollover relief.

To find out more speak to Alastair Byrne at JWP Creers.