What is Capital Gains Tax?

Capital Gains Tax is a tax that is payable on profit gained after the sale or use of any asset, including property, shares, and insurance payouts.

Capital Gains Tax is only charged on profit received after a certain amount, and is subject to various forms of tax relief. It is usually payable on the profit made from any property that you sell, but your car or home is exempt from this. Personal possessions sold for less than £6,000 are not subject to Capital Gains Tax.

There are many transfers of property where Capital Gains Tax does apply, for example, if a gift is given to someone who is not your spouse or partner, or if property changes hands during a divorce settlement. Assets or property that you inherit are not subject to Capital Gains Tax unless they are subsequently sold (although you may be charged Inheritance Tax on the original inheritance).

Every tax year you have a personal allowance (£10,600 for individuals in 2011-12 tax year), and Capital Gains Tax is only charged on gains in excess of this figure. There are different rates of Capital Gains Tax payable, depending on how much you have received and your total taxable income. 18% or 28% are the standard lower and higher rates for individuals currently. Any gains qualifying for Entrepreneurs’ Relief are charged at 10%.

For further Tax information, please follow the links below:

  • Income Tax includes:
    What is income tax?
    How is Income Tax calculated?
    How much income tax do I need to pay?
    Income Tax Allowances
    Income Tax Rates and Taxable Bands
    How do I pay income tax?

  • Tax Codes includes:
    Where do I find my Tax Code?
    New Tax Codes
    What does my tax code mean?
    Different Tax Codes
    More than one job
    Emergency Tax Codes

  • Emergency Tax Codes includes:
    What is an Emergency Tax Code?
    What does an emergency Tax Code look like?
    Why do I have a BR/ Emergency Tax Code?
    Can I get a Tax Refund if I have paid Emergency Tax?

  • Construction Industry Scheme includes:
    CIS For Subcontractors
    CIS For Contractors (Employers)

  • VAT (Value Added Tax) includes:
    What is VAT?
    When do I pay VAT?
    How much VAT do I need to pay?
    Do I need to register for VAT?
    How do I pay VAT?
    Can I claim VAT back?

  • Self Assessment includes:
    What is Self Assessment?
    Do I need to complete a Self Assessment tax return?
    How do I get a Self Assessment tax return form?
    How do I register for Self Assessment?
    Can I register for Self Assessment on behalf of a company or trust?
    What is a Unique Tax Reference number (UTR)?
    How do I get a Unique Tax Reference (UTR) number?
    How do I complete my Self Assessment tax return online?
    Can I complete my Self Assessment tax return on paper?
    Record keeping
    Self Assessment Tax return deadlines
    What if I submit my tax return late?
    What if I submit my tax return incorrectly?
    How is my tax calculated?
    Do I need to check my tax calculation?

  • National Insurance includes:
    What is National Insurance?
    What are the different types of National Insurance?
    Who pays National Insurance?
    What is National Insurance used for?
    Do your National Insurance payments affect your Pension and Benefits?
    How much National Insurance should I pay?

  • Pension Tax includes:
    Do I have to pay tax on my pension?
    Do I have to pay tax on my state pension?

  • Corporation Tax includes:
    Who needs to pay Corporation Tax?
    How much Corporation Tax do I need to pay?
    How do I pay Corporation Tax?

  • Inheritance Tax includes:
    What is Inheritance Tax?

More Info

Tax Refunds