How do I use untied for capital gains? And what's a capital gain anyway?

Last update 30 December 2019

What's a capital gain?

If you buy something valuable (which could be property or an investment), and then sell it, you could make a profit or loss. The something valuable is a capital item. And the profit or loss is a capital gain or capital loss.

A capital item could be shares, a painting, or a property that you live in or let out. If it could be subject to capital gains tax then it is called a chargeable asset.

It is not stuff that you buy and sell as your trade.

Do capital gains appear on my tax return?

There are lots of exemptions that mean that for most people capital gains won't appear on your tax return. untied does not yet support capital gains outside these exemptions.

So you won't need to declare capital gains if:
  • you sold under £46,800 of chargeable assets in a year (2018/19 rates); and
  • you made under £11,700 of profit (capital gains) on them

This covers most people and you'll be able to use untied!

You will not be able to use untied if:

  • gains cross from one period to another
  • you want to claim capital gains reliefs including offsetting a loss

Also untied does not yet support carrying forward losses from one year to another.

Note: what is a chargeable asset?
A chargeable asset is a capital item that could be subject to capital gains tax.
This includes:
  • most personal possessions worth £6,000 or more, apart from your car
  • property that’s not your main home
  • your main home if you’ve let it out, used it for business or it’s very large
  • shares that are not in an ISA or PEP
  • business assets

What's this got to do with capital allowances?

A word to the wise. Don't get confused by the language.

For most of your assets, capital gains and capital allowances have nothing to do with each other.

Capital allowances relate to long term things used in a business like plant and machinery and are a way of spreading the cost of the purchase for tax purposes. Come to the wrong place? Capital allowances are here.

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