Hello and welcome again and thank you for your follow up question. Let me throw some light on steps you take to calculate capital gains and also calculate capital gains for you.
To begin with, you would following the following steps. While calculating your capital gains, I would presume that you do not have any other gain of this nature.
In most cases:
- You add together all of your gains for that tax year.
- You add together all of the allowable losses you've made for that tax year.
- You deduct the losses from the gains to work out the overall net gains or losses.
- If the overall net gains are below your annual tax-free allowance (known as the 'Annual Exempt Amount'), there's no Capital Gains Tax to pay.
- If the overall net gains are above the Annual Exempt Amount, you deduct unused allowable losses from a previous tax year. Deduct enough to reduce your gains to the Annual Exempt Amount. You can carry the rest forward to future tax years.
- If you have overall net gains work out which Capital Gains Tax rates apply and how to use your tax-free allowance. For 2012-13 Capital Gains Tax is charged at 18 per cent or 28 per cent for higher rate tax payers. Gains qualifying for Entrepreneurs' Relief are charged at 10 per cent.
- If you have gains chargeable at different rates, deduct the Annual Exempt Amount in the way which minimizes your tax due.
Coming to your probable tax amount, in most case, like yours, The value on which the gain (or loss) is based is normally the consideration received. However, on gifts and certain sales, the open market value is used instead.
So, it would be 90,000. On this 90,000 you will deduct any other costs that you have incurred while disposing of the assets, and after than you will add or deduct ( as the case may be) any other capital gain or loss that you have.
By this, you will reach at net amount chargeable to capital gains.
Having done this, you will deduct annual exempt limit,
The Annual Exempt Amount for the tax year 2012-13 is: £10,600 for each individual
So, deduct 10,600 from the net amount chargeable to capital gains. On this amount, you will pay:
==>A flat rate of 18% for any chargeable gains that fall within the basic rate band of income tax.
==>A flat rate of 28% for any chargeable gains that fall within the higher rate band of income tax.
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