Capital Gains Tax

Capital Gains Tax is a tax charged if you sell, give away, exchange or dispose of a capital asset and make a profit or 'gain'.

It is something that you own such as a house, shares in companies or other possessions.

Capital Gains Tax is a tax charged if you sell, give away, exchange or dispose of an asset and make a profit or 'gain'.

Each tax year, most UK residents are allowed to make a certain amount of capital gains before they have to pay Capital Gain Tax. This is because they are entitled to an annual tax-free allowance, called the annual exemption or annual exempt amount.

You are liable to tax on your half of any gain arising, assuming the asset is owned equally. You will also benefit from your own annual exempt amount (currently £12,300) too.

Currently Capital Gains Tax is charged at the rate of either 10% or 18% for basic rate taxpayers. For higher or additional rate taxpayers, the rate is either 20% or 28%.

There are several other considerations to be mindful of when disposing of or looking to improve an asset

Yes - if you are UK resident you may be liable to Capital Gains Tax on disposals of assets located anywhere in the world, (not just in the UK).

You do not pay Capital Gains Tax when you inherit an asset, but you may have to pay Capital Gains Tax if you sell, give away or exchange an asset you inherited and it has increased in value since the date of death.

If you gift an asset to someone, there is no physical receipt of cash but the asset still has an intrinsic value.