What are the Capital Gains Tax Allowances for Companies?

Wondering about capital gains tax allowances for companies in the UK. Well, in simple words, a capital gains tax is referred to as a fee amount that is applicable when investors are earning. In usual cases, the investors earn profits by selling their property, and the tax is imposed on such profit earnings in the UK. This comprehensive guide is based on capital gains tax allowances for companies and how they are implemented on the profits in the UK. Carry on reading to learn more about capital gains tax allowances for companies.

 

What are the Capital Gains Tax Allowances for Companies?

Capital gains tax is a fee that is imposed on the profit earned by any investor on the sale of property or stock shares. This tax is basically on the gain that is made, not the total amount received by the investor. For example, if an investor purchases a painting for £5000 and sells it for £25000. So, it’s the gain of £20,000, which means the amount received minus the amount spent. Not all assets are liable to tax payment because there are some tax-free assets if the total amount falls under the tax-free allowance.

What Assets are Chargeable to Capital Gains Tax?

The assets that are exempted from capital gains tax include the following.

  • Business assets
  • Most shares
  • Land and property
  • Most personal possessions worth £6000 or more
  • other than moveable property.

What is the Annual Exemption in the Year 2025?

The government has reset the limit for the capital gains tax in the financial year 2025. The limit for capital gains tax exemption for the year 2025 is £3000 per person. A person is liable to pay capital gains tax in the UK above this amount. The transfer of assets between spouses is labelled as “no gain, no loss.”

The transfer is considered as neither profit nor loss, and the recipient resumes the donating spouse’s base cost. This is a great opportunity for the transfer of assets between spouses. However, the receiving partner may pay tax if later he or she sells the assets and the total amount does not fall under the category of capital gains allowance.

1- Capital gains allowance for trusts

For the year 2025, the capital gains allowance amount for trusts that are exempted from tax is £1500. However, one may claim relief or deduction in tax by deducting losses from the overall amount.

2- Transferring the assets to charity

The transfer of assets to charity is also exempted from tax. However, the donor must pay tax if the following conditions are met:

  • If the donor is selling on an amount more than he paid for it
  • If the donor is selling it for less than the market value.

Moreover, the actual gain or loss in this transfer depends on how much the charity is paying, not the actual capital value of the asset.

What is Estimating the Payable Tax Amount?

This calculation is made when someone is selling or purchasing an asset. It is important to calculate the payable tax amount. This includes:

1- Calculate total taxable gains

The tax is applicable only on the gains in each asset transfer, not on the total capital amount.

  • For calculating the taxable amount, calculate the gain in each asset transfer above the threshold value, i.e., £3000 per person. Calculate this amount for each possession, such as land, a car, UK property, shares, or business assets.
  • Add up all the capital gains taxes of all the possessions or transfers made in the financial year.
  • Deduct the allowable losses that are exempted from capital gains tax by the United Kingdom government.

Moreover, the tax year runs from 6th April 2025 to 5th April 2026. If your total gains are above the allowance limit, you need to pay the calculated tax amount.

2- If the gains are tax-free

If your total gains fall under the tax-free allowance, you do not need to pay anything. However, you have to report the tax returns if

  • The total capital gain was more than £50,000
  • You are registered for self-assessment

3- A Non-Resident in the UK

You still need to report your capital gains even if you are a non-resident and your capital gains are under the tax-free allowance. Non-residents in the UK do not pay tax on other capital gains.

4- Capital gains tax rates

The capital gains tax rates in the UK depend on various factors. This includes the following:

i- If you are a higher-rate taxpayer:

In the UK, if you pay additional tax, the payable tax amount will depend upon:

  • If the capital gain is from 30th October 2024 onwards, then you need to pay:
  • 24% on capital gain on residential property
  • 28% on capital gain on managing an investment fund
  • 24% on capital gains on other taxable assets such as cars, shares, etc.

ii- If you pay the basic tax rate:

In this case, you need to calculate your taxable gains as mentioned above and deduct all losses, if any, from your total tax amount. If your calculated tax amount is within the basic tax range, you only need to pay a certain percentage of your total gains from 30th October 2024 onwards.

Are you looking for professional tech-savvy tax advisors and accountants in the UK to guide you? Contact us now!

 

The Bottom Line

In conclusion, to understand capital gains tax allowances for companies, it is crucial to know that the gains are above the basic tax range; you need to pay a certain percentage of your total gains. The UK government has mentioned all the scenarios on their official website for public guidance and smooth transfer of funds and assets among different sectors of life. You can also get in touch with one of our professionals to get guidance regarding capital gains tax allowances for companies.

Disclaimer: All the information provided in this article on capital gains tax allowances for companies, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +
Reviews
0 +

Refer Clients & Earn Up to 10% – Join Our Reward Program!

Request A Callback