cgtYou don’t pay capital gains tax on the full amount you make as everyone has a yearly tax-free allowance: £10,600 in 2012-13, £10,900 in 2013-14. In addition, some gains are tax-free

 

On your 2012-13 tax return, you must give details if your taxable gains for the year came to more than £10,600 or the total value of the assets you disposed of (other than those which are tax-free) came to more than £40,400. HMRC’s online tax return service includes capital gains.You must include your workings for each capital gain or loss that you report.

Tax-free capital gains:

  • Gifts
  • Gifts to charities.
  • Sale of your only or main home
  • Private cars.
  • Personal possessions (‘chattels’) such as antiques worth no more than £6,000.
  • Betting, pools and lottery winnings.
  • National Savings & Investments products, Isas, pensions and child trust funds.
  • Proceeds from life insurance policies, unless bought second-hand.
Customer group 2012-13 2013-14 2014-15
Individuals, personal representatives and trustees for disabled people £10,600 £10,900 £11,000
Other trustees £5,300 £5,450 £5,500

2011-12, 2012-13 and 2013-14

The following Capital Gains Tax rates apply:

  • 18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first )
  • 28% for trustees or for personal representatives of someone who has died
  • 10% for gains qualifying for Entrepreneurs’ Relief

If you’re not sure how to work out your taxable income, see the examples in the section below ‘Working out your Capital Gains Tax for 2013-14’.

The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax.

Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.

There’s one Annual Exempt Amount for:

  • most individuals who live in the UK
  • executors or personal representatives of a deceased person’s estate
  • trustees for disabled people

Most other trustees get a lower Annual Exempt Amount.

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