Capital Gains for Businesses

Understanding the reliefs and allowances available helps you avoid paying more tax than necessary.

• Annual CGT exemption – each year a set amount of gains is tax-free. You still need to report if your total disposals exceed HMRC’s reporting thresholds or if you want to register losses.
• Business Asset Disposal Relief (BADR) – formerly Entrepreneurs’ Relief. May reduce the CGT rate on qualifying disposals (e.g., a sole trader selling all/part of a business, or shares in a personal trading company) where strict conditions are met.
• Rollover/Replacement of Business Assets Relief – in some cases, gains on business assets can be deferred when proceeds are reinvested in qualifying new assets.
• Gift hold-over relief – possible deferral where business assets are gifted (including some transfers into trusts).
• Use of losses – set current-year losses against gains; claim and carry forward unused losses for future years.
• Landlords (property business) – for CGT you can add capital improvement costs (that enhance or create value) to your base cost; day-to-day repairs are not enhancements and belong in income expenses instead.

Good records make year-end filing faster and help you claim correctly:

• Acquisition: dates, price, legal/agent fees, SDLT; for shares/crypto, keep platform statements and fees.
• Disposal: completion date, sale proceeds, selling costs (legal/agent fees).
• Enhancements: invoices for capital improvements (extensions, conversions) kept for CGT; exclude routine repairs.
• Pooling (shares/funds/crypto): keep pooled cost calculations where HMRC pooling rules apply.
• Losses: computations for realised losses and evidence of any previously claimed losses brought forward.
• Property business notes: ownership shares, FHL status (if applicable), and any periods of private use.

You can keep books in your own spreadsheet or use Ftax Cashbook (optional) during the year; at filing time you’ll enter totals in the Ftax forms.

It’s easy to confuse CGT with income-tax Payments on Account (PoA):

• CGT is not included in the standard Payments on Account system. CGT is usually settled with your Self Assessment balancing payment by 31 January after the tax year.
• UK residential property disposals may require a CGT payment on account shortly after completion via the separate property CGT return (this is different from income-tax PoA). That payment is then reflected against your final position when you complete Self Assessment.
• If your income-tax bill (from trading/rents etc.) is high, HMRC may ask for Payments on Account towards next year’s income-tax/NIC, but not towards CGT.

Filing early with Ftax gives you the numbers in good time, so you can plan cash flow and avoid last-minute surprises.

• Keep evidence for your calculations and any reliefs claimed.
• Register and claim losses promptly so you can carry them forward.
• Amend if needed: if a late platform statement arrives or you spot an error, you can usually amend your return within HMRC’s time limits.
• Avoid duplication: rental property repairs belong in income expenses; enhancements belong in CGT.