Published On: Thu, Mar 14th, 2019

April 2019 tax changes: Do you have shares or a second home – you could be £300 better off | Personal Finance | Finance


Some big changes are being introduced for the 2019/20 financial year, despite Chancellor Philip Hammond’s Spring Statement bearing little mention of taxes or tax reliefs. The annual Capital Gains Tax exempt is rising from £11,700 to £12,000. That is an extra £300 tax-free annual allowance, formally called the Annual Exempt Amount (AEA), open to individuals in the UK. This means people choosing to part with shares or a second home in the next financial year will be among those better off.

What is Capital Gains Tax?

Capital Gains Tax is the tax on the profit of a personal item you have sold that has increased in value.

The important thing to remember is that you are not being taxed for the amount on the product sold but on the profit only.

Many of your personal possessions are classed as “assets” under the current Government rules such as second homes, cars and shares.

The 2019/2020 rise means, therefore, you will have an additional £300 available tax free if you decide you no longer want these goods.

If you have only one property and have lived in it as your main home the entire time you have owned it, then you do not have to pay Capital Gains tax when selling it.

Not all shares and investments are subject to taxes – ISAs and PEPs are two examples of this.

But other shares, units in a unit trust and certain bonds are subject to Capital Gains Tax.

However, Premium Bonds and Qualifying Corporate Bonds are tax-free assets.

What about Entrepreneurs’ Relief?

If you own shares in your business, you can apply for entrepreneurs’ relief.

It means you will pay 10 percent tax on any qualifying assets, subject to conditions.

The shares must be disposed of within a certain amount of time before you can apply.

The time period for the qualifying conditions is being extended from April 6, moving from 12 months to 24 months.

So for the 2019/20 tax year ending April 5, 2020, your new deadline to claim is now January 31, 2022.

For further information, visit https://www.gov.uk/entrepreneurs-relief



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