Personal Tax

Capital gains

The rate applies to individuals and trustees, but not companies, which remain chargeable at the rate applicable to general profits.
Rates
Chargeable persons
2021/22
2022/23
2023/24
2024/25
Individuals liable to basic rate income tax - except for gains on residential property*
10%
10%
10%
10%
Individuals liable to higher rate income tax - except for gains on residential property*
20%
20%
20%
20%
Individuals liable to basic rate income tax - for gains on residential property *
18%
18%
18%
18%
Individuals liable to higher rate income tax - for gains on residential property *
28%
28%
28%
24%
Trustees and personal representatives of deceased estates
20%
20%
20%
20%
Companies - corporation tax rate applicable to total profits
19%
19%
19% to 25%
19% to 25%
* The capital gains tax (CGT) rate for an individual will depend on the level of taxable income. To the extent that there is some unused basic rate band the gain (or part) will be taxed at 10%. Any gains above the limit of the basic rate band will be taxed at 20%. The rates of 18%/28%/24% will continue to apply to residential property gains not qualifying for private residence relief and carried interest.
** Non-natural persons include companies, partnerships or collective investment schemes. The Finance Act 2013 provides that the CGT charge arises on disposals of residential property since 5 April 2013 if it has previously been subject to ATED (annual tax on enveloped dwellings).
Main exemptions
Exemption name
2021/22
2022/23
2023/24
2024/25
Annual exemption - individuals (see Note 1 below)
£12,300
£12,300
£6,000
£3,000
Annual exemption - trustees (see Note 2 below)
£6,150
£6,150
£3,000
£1,500
Annual exemption for companies
Nil
Nil
Nil
Nil
Chattels exemption (see Note 3 below)
£6,000
£6,000
£6,000
£6,000
Gifts to charities
See Note 4 below
See Note 4 below
See Note 4 below
See Note 4 below
  • Note 1. Where the remittance basis is claimed by someone who is a non-UK domiciled individual, the taxpayer will not be entitled to the annual exemption.
  • Note 2. Trustees generally have an annual exemption, but this figure is shared between trusts created by the same person, subject to a minimum of 10% of the full exemption.
  • Note 3. Chattels with an expected useful life of 50 years or less (for example cars and boats) are exempt from CGT. Gains on other chattels are exempt if proceeds of sale do not exceed £6,000 per item. Where they do, marginal relief may be claimed. This is calculated as 5/3rds of the excess of proceeds over £6,000. CGT is calculated on this figure or the actual gain, whichever is the less. If proceeds are above £15,000 no relief is due and the gain is calculated in the normal way. Special rules apply to losses.
  • Note 4. Gifts to charities are normally free of CGT.
Gains on death
  • There’s no CGT chargeable on unrealised gains on assets owned by an individual at their date of death. Nevertheless, the assets cost for CGT is uplifted to their market value (at the death date) in the hands of the executors and beneficiaries of the estate.
Business asset disposal relief (formerly entrepreneurs’ relief)
  • Since 6 April 2011 the first £10 million of qualifying business gains are subject to relief. This means that the gains up to this limit will be charged at only 10%. The £10 million is a lifetime limit. Gains in excess of £10 million are charged at 20%. Budget 2020. For gains on or after 11 March 2020 the limit has been reduced to £1 million. Also announced that the name of the relief is changed to business asset disposal relief from 6 April 2020.
  • The types of asset qualifying for business asset disposal relief (BADR) are those that previously qualified for business asset taper relief. This covers:
    • a trading business carried on by the individual alone or in partnership
    • assets owned by the individual and used in their “personal” trading company or partnership; and
    • shares or securities in a trading company where the individual owns 5% or more and is an officer or employee. And from 29 October 2018 the individual has a 5% interest in the distributable profits of the company plus a 5% interest in the assets available for distribution to equity holders in a winding up. The 5% limit can be less where the shares are held as an EMI and are disposed of after 6 April 2013.
  • BADR may not apply to gains made from the sale of goodwill on or after 3 December 2014. The restriction applies where the sale is to a close company (broadly one controlled by five or fewer individuals) which is related to the seller. For tax purposes, the seller and the company are related where the seller directly or indirectly controls the company, for example they hold the majority of its ordinary shares.
  • The restriction to BADR does not apply to gains relating to the sale or transfer of goodwill where the claimant holds less than 5% of the shares and voting power of the company. Relief will also be due where more than 5% of the shares/voting power are held and the transfer of the business to the company is part of arrangements for the company to be sold.
  • The qualifying conditions for BADR must be met for a period of one year for sales and transfers on or before 5 April 2019 and two years for later disposals or transfers.
Rollover relief
  • Rollover relief is allowed on the disposal (sale or gift) of certain assets used for trading purposes, including land, buildings and fixed plant or machinery. In order to obtain a rollover of the full amount of CGT due, the whole of the sale proceeds (or deemed proceeds in the event of a gift) must be reinvested into the replacement business assets. The reinvestment must take place during the period beginning one year before and ending three years after the date of disposal of the old asset.