Capital gains tax (CGT)

CGT is charged on any profits (the ‘gains’) you make when you sell (or transfer) shares and unit trusts or other assets such as a second home. If the total of any gains realised in the year, minus any losses, exceeds your annual allowance the excess is liable to CGT.

CGT has a different tax rate depending upon whether it applies to business assets or non-business assets.

Annual capital gains tax allowance: £12,300 (2021/22)

2021/22 Capital gains tax rates (non-business assets)

Capital gains	Tax rate
Gains which when added to taxable income fall in the UK basic rate tax band	10%
Gains which when added to taxable income fall in the UK higher or UK additional rate tax band	20%

Capital gains on residential property which is not a main residence will be taxed at 18% and 28% instead of 10% and 20%.

Entrepreneurs’ Relief (Business assets)

Business assets are generally a share (or interest) in the company or firm you work for. Entrepreneurs’ Relief is subject to meeting certain criteria – Please visit the HMRC website for more information