Capital Gains Tax

All you need to know about Capital Gains Tax in the United Kingdom...

This is a tax on the profit that is made when an asset is sold, for example a house that is rented out in the UK. It is not normally applicable for property that is considered the primary residence, nor for assets or personal belongings worth £6,000 or less.

Examples of when Capital Gains Tax (CGT) must be paid:

  • when someone sells, gives away or exchanges an asset worth more than £6,000
  • when someone receives money from an asset

Examples of when CGT is not required to be paid

  • selling a car
  • selling the main home
  • on betting or lottery winnings
  • income

Exceptions to the rule

Married couples or couples living together in a civil partnership can transfer assets to each other without having to pay the tax. However, those assets cannot be given or sold below value to the couple's children without paying CGT.

  • For more information on Capital Gains Tax from HM Revenue & Customs: Click here

How much must be paid

CGT is paid at the end of each tax year, which in the UK runs from 6 April to the following 5 April. It is charged on the total of a person's taxable gains, although everyone is exempt from paying tax on the first £10,000 every year.

There are two tiers of payment:

  1. A tax of 28 per cent for higher rate and additional rate taxpayers
  2. A tax of 18 per cent for all other UK residents

How to pay Capital Gains Tax

CGT must be paid through the Government's Self Assessment System, which can be obtained and filled in online. A payment will be taken by direct debit set up by the bank.

  • There are clear instructions on how to do so online: Click here

Advice can also be sought at the HMRC's Online Service Helpdesk, Monday to Friday from 08:00-20:00 and Saturday from 08:00-16:00.

  • Tel: 0845 605 5999

Further Information