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Capital Gains Tax (CGT) - is a tax on the profit when you sell or dispose of something that has increased in value. You pay capital gains tax on the gain when you dispose of most personal possessions worth £6,000 or more, apart from your car, property that isn’t your main home, shares that aren’t in a NISA, ISA or PEP & business assets (but see Entrepreneurs’ relief below).
You don’t usually pay tax on gifts to your husband, wife, civil partner or to a charity. You don’t pay CGT on gains you make from: ISAs or PEPs, UK gilts & Premium Bonds, betting, or lottery winnings.
Capital Gains Tax allowances - You only have to pay capital gains tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). Capital gains tax rates of 10% and 20% introduced for disposals on or after 6 April 2016 do not apply to transactions involving residential property. Capital gains tax rates for these transactions remain at 18% and 28%. An income tax trade loss may be offset against capital gains.
|Tax year||Annual Exempt Amount|
|6 April 2017 to 5 April 2018||£11,300|
|6 April 2016 to 5 April 2017||£11,100|
Entrepreneurs’ relief (ER)
Entrepreneurs’ relief (ER) - may be available on certain business disposals and has the effect of charging the first £10m (from 6 April 2011) of gains qualifying for the relief at an effective rate of 10%. The relief applies to gains arising on a disposal of:
Business asset rollover relief and Gift Hold-Over relief
Business asset rollover relief - You may be able to delay paying Capital Gains Tax if you:
Business Asset Rollover Relief means you won’t pay any tax until you sell the new asset. You may then need to pay tax on the gain from the original asset.
You can also claim:
Gift Hold-Over Relief - You may be able to claim Gift Hold-Over Relief if you give away business assets (including certain shares) or sell them for less than they’re worth to help the buyer. Gift Hold-Over Relief means:
Tax isn’t usually payable on gifts to your husband, wife, civil partner or a charity.
Eligibility - The conditions for claiming relief depend on whether you’re giving away business assets or shares.
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