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Interactive Diagnostic

Stratford-upon-Avon

13 The Courtyard
Timothy's Bridge Road
Stratford-Upon-Avon
Warwickshire CV37 9NP

01789 294484

enquiries@gjassociates.co.uk

London

7-8 Stratford Place
Mayfair
London
W1C 1AY

0207 495 0304

enquiries@gjassociates.co.uk

Working out capital gains

As with the Income Tax personal allowances, taxpayers have an annual exempt amount for Capital Gains Tax (CGT) which is forfeited if not used. The annual exemption for individuals in 2023-24 was reduced to £6,000 (from £12,300) and is set to be further halved to £3,000 from April 2024. A married couple each have a separate exemption. This also applies to civil partners who are treated in the same way as married couples for CGT purposes. 

To work out capital gains for a tax year, you should take the following steps:

  1. Work out the gain for each asset (or your share of an asset if it’s jointly owned). Do this for the personal possessions, shares or investments, UK property or business assets you have disposed of in the tax year.
  2. Add together the gains from each asset.
  3. Deduct any allowable losses.

If the total gains are less than the relevant annual exempt amount, then no CGT is due. Taxpayers still need to report gains in their tax return if both of the following apply. The total amount they sold the assets for was more than 4 times their allowance and they are registered for Self-Assessment.

Married couples and civil partners should ensure that assets sold at a gain are either jointly owned or that each partner utilises their annual exempt amount wherever possible. Any unused part of the annual exempt amount cannot be carried forward and is forfeited if unused in the current tax year.

CGT is usually charged at a simple flat rate of 20%. If you only pay basic rate tax and make a small capital gain, they may be subject to a reduced rate of CGT of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT. A higher rate of CGT (8% supplement) applies to gains on the disposal of chargeable residential property.

If you have sold or are planning to sell any assets in the current tax year it is important to ensure that you take full advantage of the annual CGT exemption and arrange your affairs to ensure the optimum CGT position. For example, capital losses are deducted from gains before net gains are calculated. Crystallising a loss that will waste the annual exemption should therefore be avoided.

Grenfell James Technology Adoption Index

How does your business perform against others adopting financial tech? Find out with our interactive diagnostic:

1.

How does your business receive invoices?

A)

Invoices are mainly received in paper form

B)

Invoices are mainly received by email

C)

Invoices are emailed then automatically forwarded to a designated mailbox

2.

How are purchase invoices processed?

A)

Invoices are entered manually

B)

Invoices are attached to manually raised invoices

C)

Automated software (e.g. ReceiptBank, 1Tap, HubDoc etc) collates invoices

3.

How are accounts processed?

A)

Using Excel/paper-based

B)

Using Computer-based, offline software

C)

Using cloud-based accountancy software

4.

How often is business data revised?

A)

Data is updated annually

B)

Data is updated quarterly

C)

Data is updated monthly or more often

5.

How is banking updated for your business?

A)

Banking is updated manually

B)

Banking is updated by imports

C)

Banking is updated via a live feed

6.

How are bank payments made?

A)

Bank payments are manual

B)

Bank payments are made using bulk imports

C)

Bank payments are made directly via accounting software

7.

How are bank receipts reconciled?

A)

Receipts are chased and reconciled manually

B)

Receipts are chased and reconciled automatically

C)

A third-party platform is used to chase debts and collect fees

8.

How often are management reports produced?

A)

No reports are provided

B)

Reports are provided but often too late to be valuable

C)

Reports are automated with real-time information

Score 8-12:

Curious Exploration

Your financial technology phase is Curious Exploration

% of respondent businesses are in this phase too.

Switching accountancy systems may seem like an upheaval, but can be much more straightforward than most businesses imagine. From talking to our clients, they have found moving from paper invoicing and desktop-based accounting software to the cloud and apps quickly makes the transition process a worthwhile investment of time. Digital accounting solutions bring in streamlined processes, up-to-date business data and greater confidence in the accuracy of information when making financial decisions.

Grenfell James works with your team to fully assess the needs of your business and minimise the impact of any transitions for solutions we recommend.

Find out more about App Advisory

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Score 13-19:

Measured Discovery

Your financial technology phase is Measured Discovery

% of respondent businesses are in this phase too.

Once cloud accountancy software is in place, there’s still plenty of scope to improve your accountancy processes and make sure your business is maximising the benefits of adopting a digital accounting solution. Grenfell James assesses each business to understand how any implemented solutions are being used, identify areas for improvement and the needs of the business overall to support your business goals and achieve success.

Our team of experts can discuss a range of time-saving automation and get different apps and cloud-based solutions talking to create and manage a digital accountancy eco-system to help your business grow.

Find out more about App Advisory

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Score 20-24:

Bold Innovation

Your financial technology phase is Bold Innovation

% of respondent businesses are in this phase too.

You know the benefits of accounting technology and the impact it can have on your business goals. If you want to take it a step further, our team can conduct a systematic review of your processes, apps and business goals to ensure your digital accountancy ecosystem is keeping pace with the changing needs of a growing business.