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Capital Gains Tax (CGT) - is a tax on the profit when you sell or dispose of something that has increased in value. You pay capital gains tax on the gain when you dispose of most personal possessions worth £6,000 or more, apart from your car, property that isn’t your main home, shares that aren’t in a NISA, ISA or PEP & business assets (but see Entrepreneurs’ relief below).

You don’t usually pay tax on gifts to your husband, wife, civil partner or to a charity. You don’t pay CGT on gains you make from: ISAs or PEPs, UK gilts & Premium Bonds, betting, or lottery winnings.

Capital Gains Tax allowances - You only have to pay capital gains tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). Capital gains tax rates of 10% and 20% introduced for disposals on or after 6 April 2016 do not apply to transactions involving residential property. Capital gains tax rates for these transactions remain at 18% and 28%. An income tax trade loss may be offset against capital gains.

Tax year Annual Exempt Amount
6 April 2017 to 5 April 2018 £11,300
6 April 2016 to 5 April 2017 £11,100

Other reliefs:

  • Entrepreneurs’ relief (ER)

    Entrepreneurs’ relief (ER) - may be available on certain business disposals and has the effect of charging the first £10m (from 6 April 2011) of gains qualifying for the relief at an effective rate of 10%. The relief applies to gains arising on a disposal of:

    • the whole, or part, of a trading business that is carried on by the individual, alone or in partnership;
    • shares in a trading company, or holding company of a trading group, provided that the individual owns a 5% shareholding and has been an officer or employee of the company;
    • assets used by a business or a company which has ceased;
    • assets used in a partnership or company but owned by an individual, if the assets disposed of are associated with the withdrawal of the individual from the partnership or company.
  • Business asset rollover relief and Gift Hold-Over relief

    Business asset rollover relief - You may be able to delay paying Capital Gains Tax if you:

    • dispose of some business assets
    • use all or part of the proceeds to buy new assets

    Business Asset Rollover Relief means you won’t pay any tax until you sell the new asset. You may then need to pay tax on the gain from the original asset.

    You can also claim:

    • provisional relief if you’re planning to buy new assets with your proceeds but haven’t done yet
    • relief if you use the proceeds to improve assets you already own

    Gift Hold-Over Relief - You may be able to claim Gift Hold-Over Relief if you give away business assets (including certain shares) or sell them for less than they’re worth to help the buyer. Gift Hold-Over Relief means:

    • you don’t pay Capital Gains Tax when you give away the assets
    • the person you give them to pays Capital Gains tax (if any is due) when they sell (or ‘dispose of’) them

    Tax isn’t usually payable on gifts to your husband, wife, civil partner or a charity.

    Eligibility - The conditions for claiming relief depend on whether you’re giving away business assets or shares.

Rates & Allowances Pages ► Income Tax Rates & AllowancesCapitlal Gains TaxPensions

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