Capital Gains Tax

Capital Gains Tax (CGT) is the tax you pay when you sell an asset (a property, shares, Bitcoin, personal possessions etc.) for a profit. Any profit you make is known as a capital gain. Here’s the rate that you’re charged for various investments:

Type of asset Basic rate Higher rate
Shares 10% 20%
Residential property 18% 28%
Bitcoin/cryptocurrency 10% 20%
Other 10% 20%

How much can I make before owing CGT?

You only pay CGT on your profits that are above the Capital Gains Tax allowance. In the 2023/24 tax year, this Capital Gains Tax allowance is £6,000. This is down from £12,300 in the 2022/23 tax year.

Now, if you make less than £6,000 profit in a tax year, it’s tax-free – but be aware that this is £6,000 across all your profits, not per gain.

Capital Gains Tax is calculated separately from your general earnings and is taxed differently – you pay Income Tax on your self-employment and rental incomes, and CGT for things such as selling a family heirloom, or if you are a landlord that sells a buy-to-let property.

If you are an individual taxpayer and you make a capital gain above the CGT threshold, you will need to file a self-assessment tax return to declare the profit and pay the relevant tax on it.

Frequently Asked Questions

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