In short, Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
Put simply it is the gain you make that’s taxed, not the amount of money you receive.
When you dispose of an ‘asset’ this could include:
- Selling it
- Giving it away as a gift, or transferring it to someone else
- Swapping it for something else
- Getting compensation for it – like an insurance payout if it’s been lost or destroyed
For more information regarding CGT please visit https://www.gov.uk/capital-gains-tax
CGT Assets – What You Pay On
CGT becomes payable when you sell or dispose of personal possessions worth £6000 or more. Other payable CGT also becomes payable upon:
- Propertythat’s not your main home
- Your main home if you’ve let it out, used it for business or it’s very large
- Sharesthat are not in an ISA or PEP
Capital Gains Tax Allowances Explained
You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). The Capital Gains tax-free allowance is:
- £12,300
- £6,150 for trusts
You can see tax-free allowances for previous years via the official treasury website at https://www.gov.uk/capital-gains-tax
