The Capital Gains Tax (CGT) annual exempt amount is the amount of gains that you are allowed to make before paying tax on those profits.
Capital Gains Tax is paid when you sell or dispose of assets such as personal possessions worth more than £6,000, property that is not your main home, shares or business assets.
CGT is based on the amount of profit that you have made, not on the selling price.
Each year the CGT annual exempt allowance is increased in line with the rise in the Consumer Prices Index, rounded up to the next £100.
In 2018/19 the CGT allowance was £11,700.
In 2019/20 this will be increasing to £12,000.
The law also provides that the annual exempt amount available to most trustees of settlements is one half that due to individuals and so this will be £6,000 for the tax year 2019/20.
For details of all current tax rates that we monitor, please see this page.
In your first line (CGT allowance 2019/20) should the word “if” be “is” ?
Your articles are helpful. What is the name of your organisation, please?
Hi Patrick, thanks I have changed that. The website is run by myself. If you click on my name on the posts you can read a few lines about me. I have a passion for providing simple information on things that can be complex so I’m glad it’s useful.
Hi Marian
Great website! Just to be clear the CGT allowance is “on top of” my normal PAYE tax allowance?
What about if I am not resident in the UK?
Hi Dave, thanks, and sorry for the delay in replying! yes, CGT is a separate allowance to your normal PAYE allowances. For non-residents the situation is a bit more complicated so you should probably get specialist tax advice (and it also depends on what assets you are disposing of).
What happens when a family is split up and has several nationalities, British residents and aliens ? Can the gain from a property sale made by the legal executor be distributed such that each member of the family has to pay their CGT according to their position or does the executor have to pay before distribution ?…Graham
Hi Gordon, I would recommend you talk to a tax advisor on specific complex tax matters like this as we are not able to give personal financial advice, sorry.
If I gift shares to my children will capital gains be a factor?
I understand the IHT implications.
Hi David, we are not able to give financial advice but as we understand it yes, this is a disposal which would trigger CGT. Please consult a tax adviser for advice if necessary.
Hi,
I have a problem with CGT. I want to cash money held in a non ISA fund rapper, from which I want to take at least say £12K this year, lets assume the the rapper has built up over 30 years from £3K to 30K. How much of it can I take without paying tax, is it the CGT allowance or more?
Hi Brian, we can in no way give financial advice here so I would recommend speaking to a tax specialist. However, the rules for CGT state that any gains that you make on the disposal of an asset are subject to CGT, less the annual allowance. So, for example, if you sold all the proceeds of the fund then the gain would be £27k and of this £12k would be tax free. But this is very simplistic and may not exactly reflect your circumstances.So, all things being simple, if you cashed in £10k then £9k would be gain (which may be tax free using your allowance), likewise if you cashed in 44% of the fund (£13,333 say) then £12k would be the gain but should be tax free using the allowance (this also assume you have no other gains to declare in the tax year). Also you could cash in some money before 6th April 2020 and then some more in the next tax year. Again, please take professional advice to ensure that there are no other factors that will come into play.
Hi Marian,
Thanks, the articles you have written is really very helpful.
Just wanted to clarify whether Capital Gax tax rates are they different from individual person’s tax rate.
For e.g. if I have a CG of say £25k, in FY 19/20, the CGT allowance is £12k, which means £13K is taxable, would this be added to my personal income at taxed at 20/40% as per my tax slabs or would this £13K be taxed at a different rate ?
Thanks,
Kiran
Hi Kiran, thank you for your comments. Yes CGT rates are different from personal tax rates. Currently the rates are 10% and 20% depending on whether the gain falls into the 20% or 40% tax bracket. So if you had income of £45,000 then £5k would fall into the 10% tax rate and £8k would fall into the 20% tax rate. Obviously this doesn’t take into account any other factors and is a very basic example – you should always seek qualified advice. You can find out more info here.
Thank you Maria, your response is greatly appreciated.
Regards,
Kiran
Thanks Kiran, although I have just realised that I made the assumption that the gain was not from residential property which has different rates (18%/28%) which is one reason why you should take specific advice!