What is Capital Gains Tax?
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Capital Gains Tax (CGT) is a tax levied on individuals and corporations when they sell/dispose of an asset and make a profit (a capital gain). For you and I, that means a tax on any profit you make from selling a chargeable asset such as shares or a second home. The tax only applies once the particular asset is sold and a profit has been made, rather than when the asset is still held.
The tax is calculated annually on an individuals net gains. So for instance, if you sell 2 different shares during the year and one makes a loss while the other profits, your annual capital gain will be the net profit of the two.
The current rate of Capital Gains paid, varies between 18% and 28%, depending on whether youre a lower or higher rate taxpayer.
Are there any exemptions?
The good news is that not all capital sales are chargeable. Any gains made on an ISA or pension are protected from CGT. Additionally, selling premium bonds, UK gilts, your primary residence, or a private car are all tax-free. Oh, and betting, the lottery and pools also escape incurring CGT.
Is there CGT on gold and silver
Just like any other capital asset, selling gold or silver at a profit can incur CGT. However, tax efficiency is our thing. We just hate the idea of having to share any profits from gold or silver, if we dont have to.
Two of the most popular ways of avoiding CGT are by buying UK tax-free coins and Pension Gold.
Coins produced by the Royal Mint, which qualify as legal tender, are not subject to CGT as the Treasury cannot tax the movement of legal currency. This covers silver Britannias, Gold Sovereigns, Britannias and Angels. Theres no upper limit either, which is why so many customers focus on these coins as a tax-free store of wealth.
Our Pension Gold product has also proved to be a popular way of benefiting from rising gold prices without paying tax. Any profits from gold bullion, held within your Self Invested Personal Pension (SIPP), are sheltered from CGT.
If all this sounds complicated, dont worry, we specialise in guiding you to the most tax-efficient gold and silver.
Can I sell other gold or silver without paying CGT?
Everyone in the UK is allowed to make a profit on sales of 11,100 each tax year without paying CGT. This means if you buy modest amounts of taxable gold or silver, say 5,000; even if the price has doubled when you come to sell, youll still fall within your tax-free annual limit.
However, if you also need to sell other taxable assets, such as shares, in the same tax year, youll probably wish you owned more tax-free gold or silver.
With this in mind, you could sell small values of your taxable gold or silver so that you fall within your allowance. The annual calculations run from 6 April to the following 5 April, so you could sell some coins before year-end and some just afterwards.
The good news is that we focus on selling gold and silver coins which will never be liable for Capital Gains Tax. So if youre wondering if silver or gold is the tax-free investment youre looking for, you should look no further than the UK legal tender coins. Both gold and silver versions are very popular, partly due to their tax-free nature, but also because theyre very liquid. So investing in them means theyre easy to sell at optimum prices, without sharing your profits with the Treasury.