The Annual Exempt Amount is the amount of capital gains an individual can make in a tax year before Capital Gains Tax becomes due. Gains below this threshold are free of tax and do not need to be reported unless total proceeds exceed a separate reporting limit.
Using the allowance effectively
The Annual Exempt Amount cannot be carried forward to future tax years, so timing the disposal of assets across different tax years can help make full use of the allowance. Married couples and civil partners each have their own allowance.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.