Understanding Capital Gains Tax and the Role of Accountants in Tax Deferrals

Capital Gains Tax (CGT) is a tax levied on the profit made from selling assets like property, shares, or businesses in the UK. For many taxpayers and business owners, managing CGT liabilities is a critical financial concern, especially when it comes to tax deferrals—a strategy to delay tax payments to optimize cash flow and investment opportunities. But do capital gains tax accountants offer advice on tax deferrals? The answer is a resounding yes, and their expertise is invaluable in navigating the complex UK tax landscape. This article explores the role of CGT accountants, the mechanics of tax deferrals, and why their advice is essential for UK taxpayers in 2025.

What Is Capital Gains Tax in the UK?

In the UK, CGT is charged on the profit (or “gain”) when you sell or dispose of an asset that has increased in value. For the 2024/25 tax year, the CGT rates are:

• 18% for basic-rate taxpayers (previously 10% before October 30, 2024).

• 24% for higher-rate taxpayers (previously 20%).

• 24% for residential property gains (unchanged).

• 32% for carried interest from April 6, 2025.

The annual exempt amount, or tax-free allowance, is £3,000 for the 2025/26 tax year, meaning gains below this threshold are tax-free. According to HMRC, CGT raised approximately £13.3 billion in the 2024/25 tax year, a figure expected to increase to £14.7 billion in 2025/26 due to recent rate hikes. Around 264,000 individuals paid CGT in 2024/25, with 3% of taxpayers (those with gains over £1 million) accounting for two-thirds of CGT revenue.

The Importance of Tax Deferrals

Tax deferrals allow taxpayers to postpone CGT payments, freeing up capital for reinvestment or other financial goals. Common deferral strategies include:

• Enterprise Investment Scheme (EIS): Deferring gains by investing in qualifying unquoted trading companies.

• Seed Enterprise Investment Scheme (SEIS): Similar to EIS but for smaller startups.

• Rollover Relief: Deferring gains by reinvesting proceeds from business asset disposals into new business assets.

• Deferred Consideration: Structuring sales (e.g., earn-outs) to spread tax liability over time.

For example, if you sell a buy-to-let property for a £50,000 gain, reinvesting that gain into an EIS could defer the CGT until the EIS shares are sold, potentially years later. This strategy is particularly appealing given the £3,000 annual exempt amount, which is significantly lower than the £12,300 allowance in 2022/23, pushing more taxpayers into the taxable bracket.

Do CGT Accountants Offer Tax Deferral Advice?

Yes, CGT accountants in the uk  are specialists in tax planning and routinely provide advice on deferral strategies. Firms like Alexander & Co, Perrys Chartered Accountants, and Optimise Accountants emphasize their expertise in minimizing CGT liabilities through deferrals. Their services include:

• Assessing Eligibility: Determining which reliefs or schemes (e.g., EIS, SEIS, or rollover relief) apply to your situation.

• Structuring Transactions: Advising on deferred consideration or asset transfers to optimize tax timing.

• Compliance: Ensuring adherence to HMRC rules, such as reporting disposals within 60 days for residential property sales.

• Maximizing Reliefs: Identifying opportunities like Business Asset Disposal Relief (BADR), which taxes qualifying gains at 14% from April 6, 2025 (rising to 18% in 2026).

For instance, TaxScouts offers a one-off tax advice consultation for £249, where accredited accountants analyze your CGT position and recommend deferral strategies. Similarly, Optimise Accountants claims to have reduced some clients’ CGT bills to £0 by combining deferrals with other reliefs.

Why You Need a CGT Accountant for Deferrals

Navigating CGT deferrals without professional help can lead to costly mistakes. HMRC’s anti-forestalling rules, introduced on October 30, 2024, target attempts to exploit timing for tax advantages, requiring careful planning. Accountants provide:

• Expertise in Complex Rules: Deferral schemes like EIS have strict conditions, such as investing within one year before or three years after the disposal.

• Personalized Strategies: Tailoring advice to your financial goals, whether you’re a landlord, investor, or business owner.

• Risk Mitigation: Avoiding penalties for incorrect reporting or missed deadlines, such as the 60-day filing requirement for property disposals.

Consider Sarah, a landlord who sold a rental property in January 2025 for a £100,000 gain. Without advice, she faced a £24,000 CGT bill (24% rate). Her accountant recommended investing £80,000 of the gain into an EIS, deferring the tax on that portion and reducing her immediate liability to £4,800 (24% of the remaining £20,000 gain). This freed up cash for further investments, showcasing the value of professional guidance.

Key Statistics for 2025

• CGT Revenue Forecast: Expected to reach £14.7 billion in 2025/26, per the Office for Budget Responsibility (OBR).

• Rate Increases Impact: The October 2024 rate hikes are projected to affect 264,000 taxpayers, increasing administrative burdens for mid-year tax calculations.

• BADR and Investors’ Relief: The lifetime limit for Investors’ Relief dropped to £1 million from October 30, 2024, aligning with BADR.

• EIS Investments: Over £1.2 billion was invested in EIS schemes in 2023/24, with 43,000 investors claiming tax relief, per HMRC.

• Property Disposals: Approximately 50% of taxable gains in 2024/25 came from unlisted shares and property, highlighting the need for deferral strategies.

Real-Life Example: The Power of EIS Deferral

John, a tech entrepreneur, sold his startup in July 2024 for a £200,000 gain. Facing a £48,000 CGT bill at the 24% rate, he consulted a CGT accountant who recommended EIS investment. By investing £150,000 in a qualifying tech startup within three years, John deferred £36,000 of his CGT liability. The accountant also ensured compliance with HMRC’s reporting rules, avoiding penalties. This strategy allowed John to reinvest his capital while delaying the tax burden until the EIS shares are sold, potentially at a lower rate if tax rules change.

In summary, CGT accountants are pivotal in offering tailored advice on tax deferrals, helping UK taxpayers save thousands while staying compliant. Their expertise in schemes like EIS, SEIS, and rollover relief, combined with strategic transaction structuring, makes them indispensable for anyone facing a CGT liability in 2025.

Strategies and Schemes for CGT Deferrals in the UK

Tax deferrals are a powerful tool for UK taxpayers looking to manage Capital Gains Tax (CGT) liabilities, and capital gains tax accountants play a crucial role in implementing these strategies. By leveraging schemes like the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS), rollover relief, and deferred consideration structures, accountants help clients delay tax payments, optimize investments, and enhance financial flexibility. This part delves into the specific deferral strategies available in 2025, how accountants facilitate them, and real-world applications, ensuring UK taxpayers and business owners can make informed decisions.

Enterprise Investment Scheme (EIS) for CGT Deferral

The EIS is one of the most popular CGT deferral mechanisms in the UK. It allows taxpayers to defer gains by investing in qualifying unquoted trading companies, typically startups or small businesses. Key features include:

• Deferral Limit: No monetary cap on the gain deferred, though the investment must be made within one year before or three years after the disposal.

• Tax Benefits: Deferral of CGT until the EIS shares are sold, plus 30% income tax relief on investments up to £1 million annually (or £2 million for knowledge-intensive companies).

• HMRC Data: In 2023/24, 43,000 investors claimed EIS relief, with £1.2 billion invested, reflecting its popularity.

Accountants assess eligibility, ensure compliance with EIS rules (e.g., the company must be unquoted and trading), and guide clients through the investment process. For example, Simmons Gainsford highlights how EIS can “shelter” gains, but warns of anti-avoidance provisions that require professional oversight.

Case Study: Emma’s EIS Success (2024)
Emma, a property investor, sold a buy-to-let flat in October 2024 for a £150,000 gain, facing a £36,000 CGT bill at 24%. Her accountant at Alexander & Co recommended investing £120,000 in an EIS-qualifying tech startup. This deferred £28,800 of her CGT liability and secured £36,000 in income tax relief (30% of £120,000). Emma’s accountant handled HMRC reporting and ensured the investment met EIS criteria, allowing her to reinvest the deferred tax into her portfolio while complying with the three-year holding period for EIS shares.

Seed Enterprise Investment Scheme (SEIS)

The SEIS is similar to EIS but targets smaller, early-stage companies. It’s ideal for taxpayers with smaller gains or those interested in high-risk, high-reward investments. Key points include:

• Investment Limit: Up to £200,000 per year, with 50% income tax relief.

• Deferral Scope: Gains can be deferred if reinvested within the same timeframe as EIS.

• Usage Stats: In 2023/24, 2,200 companies raised £175 million through SEIS, per HMRC.

Accountants like those at Perrys Chartered Accountants help clients identify SEIS opportunities, ensuring the investment aligns with HMRC’s strict criteria (e.g., the company must have fewer than 25 employees and assets under £350,000). This scheme is particularly attractive for business owners selling smaller ventures.

Example: Mark, a consultant, sold shares in a side business for a £50,000 gain in 2024. His accountant recommended investing £50,000 in an SEIS-qualifying startup, deferring the entire £12,000 CGT liability (24% rate) and securing £25,000 in income tax relief. This dual benefit allowed Mark to support a new venture while postponing his tax bill.

Rollover Relief for Business Assets

Rollover relief is a deferral strategy for business owners reinvesting proceeds from the sale of business assets (e.g., property or equipment) into new business assets. Key features include:

• Eligibility: The new asset must be purchased within one year before or three years after the disposal.

• Tax Impact: The gain is “rolled over” into the new asset, deferring CGT until the new asset is sold.

• Usage: Commonly used by landlords and small business owners, as noted by Optimise Accountants.

For instance, a business owner selling a commercial property for a £200,000 gain could reinvest the proceeds in another business property, deferring the £48,000 CGT liability. Accountants ensure the reinvestment meets HMRC’s criteria and advise on timing to maximize relief.

Deferred Consideration Structures

Deferred consideration, such as earn-outs, allows sellers to spread CGT liability over time, often used in business sales. According to Burges Salmon, the tax treatment depends on whether the deferred amount is ascertainable at the time of sale:

• Ascertainable Amounts: Included in the CGT calculation at sale, even if paid later (e.g., £1 million payable in six months).

• Unascertainable Amounts: Taxed when received, based on the market value of the earn-out right.

Accountants structure these deals to minimize upfront tax and ensure compliance with HMRC’s anti-avoidance rules. For example, a seller receiving £500,000 upfront and £500,000 contingent on future profits could defer tax on the latter portion, reducing immediate cash flow strain.

Real-Life Example: Rachel, a tech founder, sold her company in 2024 with a £300,000 gain, structured as £200,000 upfront and £100,000 as an earn-out. Her accountant at TaxScouts advised reporting the £48,000 CGT on the upfront gain (24% of £200,000) in 2024/25, deferring the tax on the earn-out until 2026, when the payment is received. This preserved Rachel’s liquidity for new ventures.

The Role of Accountants in 2025

With CGT rates rising and the annual exempt amount fixed at £3,000, deferral strategies are more critical than ever. Accountants provide:

• Strategic Planning: Aligning deferrals with long-term financial goals, such as retirement or business expansion.

• Compliance Support: Navigating HMRC’s 60-day reporting for property disposals and anti-forestalling rules.

• Risk Management: Avoiding pitfalls like misclassifying deferred consideration as employment income, which could trigger higher taxes.

In 2025, firms like THP Chartered Accountants emphasize early planning, noting that structuring asset purchases correctly can save thousands when selling. Their Fast Track CGT service for property disposals exemplifies how accountants streamline deferral processes.

Key Considerations for Taxpayers

• Timing: Deferrals require precise timing to meet HMRC deadlines, such as EIS investment windows.

• Risk: Schemes like EIS and SEIS involve high-risk investments, requiring careful evaluation.

• Costs: Accountant fees (e.g., £249 for a TaxScouts consultation) are often offset by tax savings.

By leveraging these strategies, UK taxpayers can significantly reduce or delay CGT liabilities, with accountants serving as essential guides in this complex process.

Practical Applications and Case Studies for CGT Deferrals

For UK taxpayers and business owners, understanding how capital gains tax (CGT) deferrals work in practice is crucial for effective financial planning. Capital gains tax accountants not only offer advice on deferral strategies but also apply them in real-world scenarios, helping clients save thousands while complying with HMRC regulations. This part explores practical applications of deferral strategies, recent case studies, and tips for maximizing benefits in 2025, ensuring UK taxpayers can confidently navigate the CGT landscape.

Applying Deferral Strategies: Real-World Scenarios

CGT accountants tailor deferral strategies to diverse situations, from property investors to entrepreneurs. Here’s how they apply key schemes in practice:

Property Investors and Rollover Relief

Landlords selling buy-to-let properties often face significant CGT liabilities, especially with the 24% rate on residential property gains. Rollover relief can defer these taxes if proceeds are reinvested in business assets. Optimise Accountants notes that many landlords miss this opportunity due to unfamiliarity with HMRC rules.

Scenario: Lisa, a landlord, sold a rental property in February 2025 for a £120,000 gain, facing a £28,800 CGT bill. Her accountant at Perrys Chartered Accountants advised reinvesting the proceeds in a commercial property used for her side business. By purchasing the new asset within three years, Lisa deferred the entire CGT liability, preserving cash for property upgrades. The accountant ensured the reinvestment qualified as a “business asset,” avoiding HMRC scrutiny.

Entrepreneurs and EIS/SEIS

Business owners selling companies or shares can use EIS or SEIS to defer gains, particularly when reinvesting in startups. With 43,000 investors using EIS in 2023/24, this scheme is a cornerstone of CGT planning, per HMRC data.

Scenario: Tom, a tech founder, sold his startup in December 2024 for a £250,000 gain, facing a £60,000 CGT bill (24% rate). His accountant at Alexander & Co recommended investing £200,000 in an EIS-qualifying AI startup. This deferred £48,000 of the CGT and secured £60,000 in income tax relief (30% of £200,000). The accountant verified the startup’s EIS status and handled HMRC paperwork, ensuring Tom met the three-year holding requirement.

Deferred Consideration for Business Sales

Deferred consideration, such as earn-outs, is common in business sales, allowing sellers to spread CGT over time. Burges Salmon highlights that accountants structure these deals to minimize upfront tax, especially when payments are unascertainable.

Scenario: Sophie, a retailer, sold her boutique in 2024 for a £400,000 gain, with £300,000 paid upfront and £100,000 as an earn-out based on future profits. Her accountant at THP Chartered Accountants calculated a £72,000 CGT liability on the upfront gain (24% of £300,000), deferring the tax on the earn-out until 2026. This structure reduced Sophie’s immediate tax burden, allowing her to fund a new venture.

Recent Case Study: Maximizing Deferrals in 2024

Case Study: Michael’s Multi-Strategy Approach (October 2024)
Michael, a 45-year-old investor, sold a portfolio of unlisted shares in October 2024 for a £300,000 gain, triggered by the CGT rate increase from 20% to 24% announced in the Autumn Budget. Facing a £72,000 CGT bill, he consulted TaxScouts for deferral options. His accountant devised a multi-pronged strategy:

EIS Investment: Michael invested £200,000 in an EIS-qualifying green energy startup, deferring £48,000 of the CGT (24% of £200,000) and claiming £60,000 in income tax relief.

Rollover Relief: He used £50,000 of the proceeds to buy equipment for a side business, deferring £12,000 of the CGT.

Loss Offset: The accountant identified a £20,000 loss from a previous share sale, reducing the taxable gain to £280,000.

This approach lowered Michael’s immediate CGT liability to £9,600 (24% of the remaining £40,000 gain), saving him £62,400 in taxes for 2024/25. The accountant ensured compliance with HMRC’s 60-day reporting rules and anti-forestalling measures, filing all paperwork on time. Michael’s case underscores how accountants combine multiple deferrals to maximize savings.

Tips for UK Taxpayers in 2025

To make the most of CGT deferrals, consider these accountant-recommended tips:

• Plan Early: Engage an accountant before disposing of assets, as firms like THP Chartered Accountants stress that structuring purchases correctly can save taxes later.

• Understand Risks: EIS and SEIS involve high-risk investments, so consult accountants to balance tax benefits with financial exposure.

• Keep Records: Maintain receipts for improvements or costs, as HMRC requires evidence to deduct these from gains, per THP.

• Monitor Deadlines: Report property disposals within 60 days and meet EIS/SEIS investment windows to avoid penalties.

• Leverage Reliefs: Combine deferrals with reliefs like BADR (14% rate in 2025, rising to 18% in 2026) for maximum savings.

Why Accountants Are Essential in 2025

With CGT rates at 18% and 24% for most assets, and 32% for carried interest from April 2025, deferrals are critical for managing tax bills. The £3,000 annual exempt amount and complex HMRC rules, such as the 60-day reporting requirement, make professional advice indispensable. Accountants offer:

• Bespoke Solutions: Tailoring deferrals to your income, assets, and goals, as seen in Michael’s case.

• Compliance Assurance: Navigating anti-forestalling rules and ensuring accurate reporting, per GOV.UK guidelines.

• Cost Efficiency: Fees (e.g., £169 for a TaxScouts tax return) are often dwarfed by tax savings.

Looking Ahead

As CGT rules evolve, staying informed and seeking accountant advice is vital for UK taxpayers. Whether you’re a landlord, investor, or entrepreneur, deferral strategies can unlock significant financial benefits, with accountants guiding you every step of the way.