Capital Gains Tax is charged on the profit made when certain assets are sold or disposed of for more than their original cost, including shares, property that is not a main home, and business assets. It is paid by individuals, not companies, which instead pay Corporation Tax on chargeable gains.
Rates and the Annual Exempt Amount
Each tax year, gains up to the Annual Exempt Amount are tax-free, with different rates applying to gains above this depending on the asset type and the individual's income tax band. Business Asset Disposal Relief can reduce the rate paid on the sale of a qualifying business.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.