Remember that capital gains in the 2017-18 tax year under £11,300 are tax-free. Married couples and civil partners who own assets jointly can claim a double allowance of £22,600.
From 6 April 2016, CGT is charged at 10% if you are a basic-rate taxpayer (except on property gains, where the rate is 18%) and 20% if you pay tax at a higher rate (except on property gains, where the rate is 28%).
Remember, if you don’t use the allowance within the tax year, it’s lost forever.
What is CGT?
Capital gains tax (CGT) is a tax on the increase in value of your possessions – such as a second home, antiques or shares – during the time you have owned them.
Any tax is due when you dispose of them, usually by selling them or giving them away.
You need to have made a certain amount of profit on your items to be taxed on them. This amount depends on whether you’re a basic-rate or higher-rate taxpayer, and what the current tax-free allowance is for the tax year. Find out more about tax rates.
Typical investments that you might have to pay capital gains on include:
- a second property
- shares
- the sale of a business
- valuables such as jewellery, antiques and art
You don’t have to pay CGT if you sell a car, or if you make a profit on selling your own home.