The UK Rules

Capital Gain Tax Allowances Rules

There are times when you need to know your Capital Gains Tax Annual Exempt Allowance. It will determine the amount of tax-free profit you can realize before you need to pay CGT on the gain.

CGT ALLOWANCES: You need to know the Capital Gains tax allowance for the current accounting year.

No tax is due if profits (or gains) realized do not exceed your personal tax-free allowance. This personal allowance is also called your Annual Exempt Amount.

Capital Gains tax allowances run each tax year from the 6th of April to the following 5th of April.

The tax-free CGT personal allowance for the current tax year of 2021-22 is £12,300 for individuals and £6,150 for Trusts (up from £6,000).

In fact, the Capital Gains Tax annual exemption 2021/22 for 'chargeable assets' increased from £12,000 from the previous tax year. As a rule, you can reduce the payable Capital Gains tax bill by claiming reliefs and deducting losses.

If you report a loss, the amount gets deducted from the gains you made in the same tax year. But, if the total taxable gain is still above the tax-free allowance, you can deduct unused losses from previous tax years.

If they reduce your gain to the tax-free allowance, you can carry forward the remaining losses to a future tax year. The tax year in the United Kingdom runs from the 6th of April to the 5th of April in the following year.

CGT Gifts to Spouse

Note: The usual rules of what you pay Capital Gains Tax on apply to any gifts and assets disposed of (given or sold) to others.

Capital Gains Tax has special rules for gifts and assets given to your spouse, civil partner, or to a charity.

Capital Gains Tax Allowances 2020/21: Gifts to a SpouseThere are other rules where Capital Gains Tax is payable for chargeable assets. They apply even if you give or sell or dispose of the assets to your civil partner or spouse, such as when:

Selling the Asset Afterwards

Capital Gains Tax may need paying by your husband or wife (or civil partner) if they dispose of the asset at a later date. After the 6th of April 1982 their profit (gain) or loss on the asset, gets calculated from the value of the asset when they first owned it.

Before the 6th of April 1982, use the market value of assets at the 31st of March 1982 for working out Capital Gains Tax. This produces a figure to calculate whether you need to pay.

Note: There are other rules for Capital Gains Tax that determine the calculation from when you actually owned it. As a rule, your civil partner or spouse should keep records of what you paid for the asset.

CGT Gifts to Charity

Capital Gains Tax is not applied to any assets that you give away to charity. Even so, there are certain rules if you sell, rather than give away, an asset to charity such as if:

Note: When you are working out Capital Gains Tax profit (realisation of gain) for charities, use the sale price that they paid and not the actual value of the gifted asset.

Capital Gains Tax Annual Exempt Allowance: CGT Personal Allowance in United Kingdom