Capital Gains Tax (CGT) is the tax you pay on any profit or gain which you make when you sell or dispose of certain types of asset.
For example, if you bought shares in January 2000 for £50,000 and then in January 2012 sold those same shares for £85,000 then you have made a gain of £35,000. This gain could possibly be taxed.
Not all assets are liable to CGT when you sell or dispose of them and it is important you take advice about any proposed sale or disposal before you make it.
When you make a gift of an asset, depending on who the recipient of that gift is and the asset which is gifted then there may also be CGT payable on that gift, for example, if you own a holiday home and decide to gift that to your children then that gift would trigger a charge for CGT.
If you inherit assets then you will not be liable for any CGT but could be liable for CGT if you later dispose of that asset. In these circumstances, it is important to obtain a valuation of the asset when it is inherited (i.e. at the date of death not the date of receipt of the asset) and then you would be able to work out any gain or loss when it is subsequently sold.
Professional advice in relation to any aspect of tax is always advisable as any errors can lead to interest charges and even penalties being levied by HMRC.
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