Who needs to declare Capital Gains Tax?

CGT, which is short for Capital Gains Tax, is a tax that is charged on gains arising on “chargeable persons” making a “chargeable disposal” of “chargeable assets”. 

 First, let’s deal with what a “chargeable person” is.  

A “chargeable person” could be either an individual or a company.  

This blog is going to cover disposals by individuals, please keep an eye out for a follow-up blog covering disposals by companies.  

Individuals who are UK resident for tax purposes in the year in which the disposal takes place are considered a “chargeable person” and are subject to capital gains tax on their gains. 

• UK residents are subject to UK CGT on all disposals of chargeable assets, regardless of where in the world the assets are situated. 
• Non-UK residents only pay CGT on the disposal of interests in UK land/property.  

Now, let’s cover what a “chargeable disposal” is. 

The following disposals would be considered “chargeable”:  

• Sale or gift of the whole or part of an asset (such as property, land, etc…) 
• Exchange of an asset  
• Loss or destruction of an asset 
• Receipts of a capital sum derived from an asset, such as:
• The compensation received for damage to an asset. 
• Receipts for the surrender of rights to an asset. 

The following disposals in the eyes of HMRC would be classed as exempt, in other words, non-chargeable disposals. 

• Disposals as a result of the death of an individual 
• Gifts to charities  

Please note that a disposal classed as exempt are outside the scope of CGT and therefore the gains are not taxable, and the losses are not allowable. 

Finally, let’s cover what a “chargeable asset” is.  

The following table details the more common types of chargeable assets as well as those that are exempt.  

Chargeable Assets	Exempt
Freehold land and buildings	Motor vehicles
Unquoted/Quoted shares	Principal private residence
Certain chattels	Investments held within an ISA
Goodwill	Qualifying corporate bonds
	Gilt-edged securities
	NS&I certificates
	Prizes and betting winnings

Therefore, to conclude on who needs to declare capital gains tax in the UK, this would be any individual that is a UK resident for tax purposes and who completes a chargeable disposal of one of the above (and more) chargeable assets would need to declare CGT. 

If this blog has sparked a few questions in your mind, please feel free to get in contact on 01273 441 187 or via george@peterjarman.com and I will be more than happy to help.   

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