Newest Review: ... (and in most cases your main house). You also do not pay CGT on your car, ISA's, PEPs, Gifts from the Government, Lottery wins or money tha... more
My Views and Explanation
Capital Gains Tax
Member Name: Amanda2114
Capital Gains Tax
Advantages: My Views on the CGT
Disadvantages: My Explanation of the CGT
Ok Firstly I am going to try and explain what the Captial Gains Tax or CGT actually is, because I don't know about you but I find it all pretty complicated. My apologies if I get it wrong.
In theory is should be a pretty simple tax - if you sell something or give away something that has increased in value you could be taxed on the profit.
However, when put into practice it is much more complicated and here is why......
This tax does not apply on personal belongings worth £6,000 or less (and in most cases your main house). You also do not pay CGT on your car, ISA's, PEPs, Gifts from the Government, Lottery wins or money that is part of your income.
Additionally if you are a married couple or living together as man and wife you can exchange assets between husband and wife and be exempt from paying CGT. You can not pass belongings onto any other family members or friends without possibly having to pay CGT. If you are left something in a will you will not have to pay CGT, however, if you later sell these belongings you may have to pay CGT (the CGT will be based on value at time of death to value at time of sale)
I think that this latest move by the government will hit small businesses hard and right at the purse strings. It is the smaller businesses that this tax is really going to affect, while the bigger ones stand laughing at the further tax breaks they have been given, because by replacing the capital gains tax taper relief system with the flat rate of 18% many larger companies have actually had their tax reduced.
Smaller Businesses already pay enough tax without adding this extra burden on them. By easing the tax burden on businesses I believe that the UK will once again be a great place for people to start up their businesses, whereas at the moment I think that this is a great deterent for setting up else where.
Have you views heard - Sign the Petition
The Forum of Private Business or FPB are petitioning the Chancellor to ease the tax burden on small businesses following his announcements in the pre-budget report. I have signed the petition at: http://www.fpb.org/fpbpetitions/12.
Summary: I hope that has explained it all a little better.