Mitigating capital gains tax exposure


Shakespeare Martineau partner Hannah Tait discusses mitigating capital gains tax (CGT) exposure.


With property prices continuing to rise, a deceased person’s home could sell for significantly more than its value at the date of death – resulting in CGT becoming payable.


CGT is paid on the gain generated when an asset significantly increases in value. Higher rate taxpayers currently pay 28% on residential property gains and 20% on gains from other chargeable assets.


The amount basic rate taxpayers pay depends on the size of the gain, their taxable income and whether the gain is from residential property or other assets.


In addition, there is an annual exemption allowance of £12,300 for individuals and personal representatives.


To reduce CGT liability, property expected to sell for substantial gains can be “appropriated” to beneficiaries before being sold – enabling beneficiaries to utilise their available annual CGT allowances promptly within 60 days.


For more information, email Hannah.Tait@shma.co.uk or visit www.shma.co.uk.


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