Capital Gains Tax

The annual tax-free allowance

(Known as the Annual Exempt Amount)

Allows you to make a certain amount of gain each year before you have to pay tax. Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.

There’s one Annual Exempt Amount for:

  • Most individuals who live in the UK
  • Executors or personal representatives of a deceased person’s estate
  • Trustees for disabled people

Most other trustees get a lower Annual Exempt Amount.

From 2015 to 2016, non-residents who dispose of a UK residential property will be liable to Capital Gains Tax and, in most cases, will be able to claim the Annual Exempt Amount in the same way as for UK residents. However, this Annual Exempt Amount will not be available to companies who dispose of a UK residential property as other allowances may be claimed.

Annual Exempt Amounts

You can use your Annual Exempt Amount against the gains charged at the highest rates to minimise the tax you owe.

Rates for Capital Gains Tax

2013 to 2014, 2014 to 2015 and 2015 to 2016

The following Capital Gains Tax rates apply:

  • 18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)
  • 28% for trustees or for personal representatives of someone who has died
  • 10% for gains qualifying for Entrepreneurs’ Relief
  • 28% for Capital Gains Tax on Annual Tax on Enveloped Dwellings – the Annual Exempt Amount is not applicable

2015 to 2016

The following Capital Gains Tax rates apply:

  • 18% and 28% for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)
  • 28% for trustees or for personal representatives of someone who has died who is non-resident
  • 20% for companies