What Could Trigger Your Capital Gains Tax Bill?

 

Understanding when you need to declare profits to HMRC is essential — especially if you have recently sold or disposed of assets like property or shares. In this blog, we explain what could trigger a capital gains tax bill and how working with a tax accountant in London can help you stay compliant and minimise surprises.

Assets that could create capital gains

You may trigger a capital gains tax bill whenever you sell or dispose of certain assets for more than you originally paid. HMRC requires you to declare gains from the following:

• Property: Selling a second home, rental property, or parcel of land may incur capital gains tax. Your main residence is usually exempt unless it has been rented out or used for business purposes.
• Investments and shares: Profits from selling shares, mutual funds, or bonds may be taxable—unless the investments are held within a tax-advantaged account like an Individual Savings Account (ISA).
• Business assets: Selling business premises, equipment, or machinery can trigger a taxable gain.
• Personal possessions: Selling personal items such as antiques, jewellery, or artwork worth more than £6,000 may also lead to a capital gains tax liability. Private vehicles are generally exempt.

It’s important to track what you sell and keep accurate records. If you’re unsure whether a transaction needs to be declared, consulting a tax accountant in London can help you avoid errors and reduce the risk of HMRC enquiries later.

When you must declare gains

Even if you stay within your annual tax-free allowance, there are circumstances where you must report your gains:

• Gains above the Annual Exempt Amount: If your total asset disposals exceed £50,000—even if no gain was made—you must declare them on your tax return.
• Losses: Capital losses should also be reported, as they can be used to offset future gains and lower your tax liability.
• Property sales: All residential property disposals must be reported, and capital gains tax must be paid within 60 days of the sale—even if the amount is small.

Get advice from a tax accountant in London.

Managing your capital gains tax position properly can make a real difference to your finances. At Allenby Accountants, we tailor our advice to your situation and help you handle reporting requirements confidently.

Call us today on 0208 914 8887 to consult a trusted tax accountant in London and make sure you stay on top of your obligations.