Capital Gains tax

CGT or Capital Gains tax is the Tax amount you are liable to pay when you have made a profit on selling or disposing off a Chargeable asset by a Chargeable person. This Tax is not due on the amount which you have received but it is due on the gain you have made from selling or disposing off. Similarly, if you have a loss instead of a gain this can be off set against any other gain you may have made from other sources within a given tax year. Capital Gain Tax has its own Annual Exempt Allowance which is on top of individual’s Tax Free Personal Allowance.

Annual Exempt Allowance is also known as AEA which is currently set at £11,100 for tax year 2017/2018. However, this will be increased to £11,300 for year 2018/2019

What Assets are Chargeable for Capital Gains tax?

All assets are more or less chargeable unless exempted such as below:

  • Motor vehicle for private use
  • NS&I Certificates
  • Life insurance policies
  • Personal injury claims award
  • Mostly investment gain from ISA bonds
  • Medals awarded for bravery (not purchased)
  • Forex or Foreign currency which is acquired for personal use

Who is a Chargeable Person?

A chargeable person is someone who is a resident in UK and liable to pay CGT Capital Gains Tax on his/her worldwide gains

What are CGT Capital Gain Tax rates?

CGT or Capital Gain Tax rates are 10% or 20% depend on the individual’s personal income. If you are basic rate tax payer and your partial or full gain covers the remaining of your basic rate allowance then this will be charged at 10% and any amount above that will be charged at 20%. Please note these rates are different when it come to residential property , these are charged at 18% or 28% respectively.

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