Capital Gains Tax UK

The capital gains tax UK is imposed on the profits, which are made through the disposal of the assets. When there is an increase in the value of the property, it is called gain. The CGT or capital gains tax UK is levied on this increased value. It should also be mentioned that generally the capital gains tax is paid when someone has already disposed his or her property or asset.

According to the tax laws of UK, the capital gains tax is imposed on the following:

Selling an asset

Disposing an gifted asset

An asset that is inherited

Receiving a sum of money for an asset which has not been disposed

Exchanging of assets

Selling a part of an asset

Shares in a company

Jewelry and antiques


On the other hand, there are certain assets, which are exempted from the capital gains tax UK. Some of these are as follows:

• Private Car
• Holding foreign currency
• British Savings Bond
• Premium Bonds
• Savings certificate
• Gilts(Government Stocks of United Kingdom
• Profits from betting and lottery
• Individual Savings Certificate assets
• Assets in Personal Equity Plan
• Compensation for personal injury

The capital gains tax UK provides several deductions to the tax-payers. The cost of acquiring or disposing the property or assets are deducted from the net profit. At the same time, all those expenditures, which are done for renovating the house are also deducted from the net profit.

The rate of the capital gains tax in UK are divided in different tax slabs. The profit up to £8,800 is totally exempted from this tax. Anything more than this amount is considered for the UK capital gains tax. 10% CGT is imposed on the first £2,150 (more than £8,800) and 20% CGT is levied on next £31,150 with 40% on the balance.

Some other items that are exempted from the capital gains tax UK are listed below:

• Government securities
• National Savings and Investment Certificates
• Loan stocks
• Venture capital trust shares
• Enterprise investment scheme
• Shares offered after 18 March 1986