🇬🇧 United Kingdom Capital Gains Tax Guide
In the UK, Capital Gains Tax (CGT) is charged on profits above the annual tax-free allowance. The rate depends on your Income Tax band.
How Capital Gains Tax Works in United Kingdom
Every individual has an Annual Exempt Amount (allowance). For the 2024/25 tax year, this is £3,000. Gains above this threshold are added to your income to determine the rate.
•Annual Allowance: £3,000 (2024/25)
•Basic Rate Taxpayer: 10% on gains (within band)
•Higher/Additional Rate Taxpayer: 20% on gains
•Bed and Breakfasting Rule: You cannot reclaim losses if you rebuy the same share within 30 days.
Example: Capital Gains Tax in United Kingdom
Scenario
You sold shares with a £10,000 profit. You are a Higher Rate taxpayer.
Total Gain£10,000
Tax-Free Allowance-£3,000
Taxable Gain£7,000
Tax Due (20% Rate)£1,400
If you were a basic rate payer with unused band, you would only pay 10% (£700), provided the gain doesn't push you into the higher bracket.
UK Tax Efficiency Strategies
ISA Wrapper
Invest via a Stocks & Shares ISA. All capital gains and dividends inside an ISA are completely tax-free forever.
Allowance Utilization
Use your £3,000 allowance every year properly before April 5th; it does not carry over.
Spousal Transfer
Transfer assets to your spouse/civil partner before selling to utilize two sets of allowances (£6,000 total).
Tax Optimization Tools
Calculate Tax for Popular Stocks
Disclaimer: This is general information only, not tax advice. Tax laws change frequently and vary by individual circumstances. Consult a qualified tax professional in United Kingdom for your specific situation.
