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A Few More Weeks Await to Make use of your Tax Allowances
The end of the tax year is fast approaching on the 5th April but there is still time to make use of your tax allowances. Perhaps you have some capital gains to realise or maybe you could look to take some losses to minimise those gains you have already incurred?
An individual has an annual capital gains allowance of £11,300 for the year ending 5th April 2018 which many, I expect, are unaware of. Even more of us are unaware of the requirement to notify the Revenue when a gain has been incurred.
Some assets are exempt from capital gains such as chattels which are sold for less than £6,000, e.g. a painting or antique. There are also some losses which are not allowed, in particular a car you use for personal use, which is a shame as we all suffer a loss as soon as you drive off the forecourt!
Although you may feel claiming losses is not important as there will be no tax to pay, losses can be carried forward to offset against future gains. Losses are not automatic and they must be claimed for in a tax return for the year they were incurred. Losses can be claimed within 4 years of the end of the tax year in question. Do you have any that you have not claimed? Now would be a good time to check.
There are also costs which may be deducted to minimise gains, such as the purchase price or commission. If you use a broker or auctioneer, they should be able to provide this information for you.
When making a claim for losses or reporting a capital gain, it is important to maintain accurate records, as the Revenue may ask for them.