The Capital Gains Tax UK regulations and laws can be quite complex. Capital Gains Tax UK affects individuals rather than businesses, and is applied to increases in the value of assets such as property, possessions and shares. There are many exemptions, conditions and other factors that can influence just how much Capital Gains Tax you are liable to pay, and the tax is levied whenever you dispose of an asset. 'Disposal' can cover a wide range of situations, from selling or exchanging an asset to simply giving it away as a gift. In these cases, taxable gains are calculated by working out the increase in value that the asset has benefited from since you first acquired it.
Capital Gains Tax UK rates depend on your normal taxable income, as the taxable gains are added to that income and treated as the top part of the sum for taxation purposes. As such, the gains are taxed at the following rates:
- Up to £2,150 of income plus gains at a rate of 10%.
- From £2,150 to £33,300 of income plus gains at a rate of 20%.
- £33,301+ of income plus gains at a rate of 40%.
Exemptions and reductions in Capital Gains Tax UK include:
- An Annual Exempt Amount (AEA) of up to £9,200.
- Spousal exemption for transfers.
- Your primary residence.
- Your car.
- Disposal of personal belongings and assets of value up to £6,000.
- ISAs and PEPs.
- Winnings from lotteries and bettings.
- Some government gilt-edged securities.
For more advice and information on Capital Gains Tax UK, check out our online Fair Investment Tax Bookshop for articles, guides and software to help make handling tax easy.