Capital Gains Tax is lovingly referred to as CGT by accountants and the taxman.
- It’s a tax on gains made on disposing of capital assets, such as shares, selling your business and property, although your main home is not normally subject to CGT.
- The first £10,100 of gains you make in a year are exempt from tax. This is known as your annual exemption.
- Capital gains are taxed at 18% up to 22 June 2010. From 23 June 2010 there is a higher rate of 28% for gains where total taxable gains and income are above the income tax basic rate band of £37,400. Below that the 18% rate still applied. There are various reliefs available that can reduce this.
- Most of the legislation regarding capital gains tax is all about the exemptions and how to avoid it, so you often find there are ways around it or ways to lessen its impact.