If you are selling shares or other investments, you may incur Capital Gains Tax (CGT) on any profit, or ‘gain’, you make. You will need to work out your gain to determine if you need to pay tax, which depends on whether your total gains exceed your CGT allowance for the tax year. 

You usually pay CGT on total gains above your annual tax-free allowance, which is currently £3,000. If your gains exceed the allowance, you must report and pay CGT. This is usually done through self-assessment, with different reporting deadlines depending on the type of asset disposed of. The rate of tax depends on your income. Basic rate taxpayers pay 18% CGT on gains within the basic rate band and 24% on amounts above it. Higher and additional rate taxpayers generally pay 24% CGT on all gains.

You do not usually pay CGT when you give shares as a gift to your husband, wife, civil partner, or a charity. Additionally, shares including those held within an ISA, those in employer Share Incentive Plans (SIPs) and UK government gilts are exempt. Your gain is typically the difference between what you paid for your shares and the sales proceeds. 

You can deduct costs like stockbrokers’ fees and Stamp Duty Reserve Tax (SDRT) from your gain. Various tax reliefs may also reduce or delay your CGT liability, including Business Asset Disposal Relief, Gift Hold-Over Relief, Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), and Rollover relief. Special rules apply for working out the cost of shares bought at different times in the same company, or if sold through an investment club.

It is important to calculate your gain, consider any applicable reliefs, and report to HMRC if your total gains exceed the annual allowance.

It is important to know if HMRC is holding money that belongs to you. For example, if you have paid too much tax to HMRC, you may be able to claim a tax refund (also known as a tax rebate). Overpayments can happen for a number of reasons, including changes in your employment, paying tax using the wrong startegy or not claiming eligible expenses.

The process for claiming a refund depends on your circumstances, including whether you complete a self-assessment tax return and the type of income or expense involved. HMRC provides an online service to help you find out what you need to do if you have overpaid tax.

You may be able to claim a refund if you have paid too much tax on income from a job, job-related expenses such as working from home, fuel, work clothing or tools, a pension, overpayments revealed by a  self-assessment tax return or a redundancy payment. Refunds may also be available for UK income taxed while living abroad, interest from savings or payment protection insurance (PPI), income from a life or pension annuity, foreign income, or UK income earned before leaving the UK.

HMRC offers an online service at www.gov.uk/claim-tax-refund/y that allows you to check whether you are eligible and, in many cases, submit a claim.

If you have already claimed a tax refund, you can use HMRC’s guidance to check when you should expect a response.

Many UK businesses now borrow money from overseas lenders or form part of international business groups. Where interest is paid outside the UK, the tax rules can become surprisingly complicated. HMRC has now launched a consultation that could make one aspect of those rules much simpler.

Why are the rules so complicated?

In some circumstances, UK businesses paying interest to an overseas lender must deduct UK Income Tax before making the payment. This is known as withholding tax.

However, many countries have Double Taxation Agreements with the UK that reduce or remove this requirement. The difficulty is that businesses often need to complete a formal clearance process before they can apply the reduced rate, adding time, paperwork and uncertainty to international transactions.

What is HMRC proposing?

The Government is consulting on ways to simplify the system so that businesses can claim treaty relief more easily. Although no final decisions have yet been made, the aim is to reduce unnecessary administration while maintaining appropriate safeguards against abuse.

If implemented, the proposals could make it quicker and easier for businesses to apply the correct withholding tax treatment when making overseas interest payments.

Who could be affected?

The consultation will be of most interest to:

• Companies with overseas parent companies.
• Businesses borrowing from overseas lenders.
• Groups financing their operations internationally.
• Businesses expanding into overseas markets.

Many smaller businesses may assume these rules do not apply to them, but international borrowing arrangements are becoming increasingly common.

What should businesses do now?

There is no immediate change to the law. Existing withholding tax obligations continue to apply until any new legislation is introduced.

However, businesses involved in international financing should ensure they understand their current obligations and keep appropriate documentation supporting any claims under Double Taxation Agreements.

Professional advice can often prevent costly errors, particularly where cross-border tax rules are involved.

How we can help

International tax rules are rarely straightforward, but getting them right can avoid unnecessary tax costs, penalties and delays.

If your business pays interest overseas, is considering overseas borrowing or has questions about withholding tax, we can review your arrangements and ensure you are applying the rules correctly while keeping you informed of any future changes resulting from the consultation.