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Capital gains tax

Capital Gains Tax (CGT) is payable by individuals, trustees and ‘personal representatives’ (PRs). Companies pay corporation tax on their capital gains.

There are annual tax free allowances (the ‘annual exempt amount’) for individuals, trustees and PRs. Companies do not have an annual exempt amount.

For individuals net gains are added to ‘total taxable income’ to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income do not exceed the ‘basic rate band’.

Gains which qualify for ‘Entrepreneurs’ Relief’ are charged at 10% for the first £10m of qualifying gains.

Individuals 2016/17 2015/16
Annual exempt amount £11,100 £11,100
CGT standard rate 10% 2 18%
CGT higher rate 1 20% 2 28%
Trustees 2016/17 2015/16
Annual exempt amount £5,550 £5,550
CGT rate 20% 28%

Note…

  1. For higher and additional rate taxpayers.
  2. Higher rates may apply to the disposal of certain residential property.
  3. PRs are generally entitled to the full annual exemption available to individuals during the administration period. They pay CGT at the Trustees rate.