Capital gains tax

Rates & Annual Tax-Free Allowances


 

If a Limited Company sells or disposes of a business asset, the company will need to pay Corporation Tax on any profits (or ‘chargeable gains’).
When working out your chargeable gain, you can use Indexation Allowance Rates to work out the value of the asset at today’s prices.

Tax-free allowances for capital gains tax

The annual tax-free allowance (known as the Annual Exempt Amount) allows you to make a certain amount of gains each year before you have to pay tax. Nearly everyone who is liable to Capital Gains Tax gets this tax-free allowance.

There’s one Annual Exempt Amount for:

  • most individuals who live in the UK

  • executors or personal representatives of a deceased person’s estate

  • trustees for disabled people

Most other trustees get a lower Annual Exempt Amount. 

From 2015 to 2016, non-residents who dispose of a UK residential property will be liable to Capital Gains Tax and, in most cases, will be able to claim the Annual Exempt Amount in the same way as for UK residents. However, this Annual Exempt Amount will not be available to companies who dispose of a UK residential property as other allowances may be claimed.

 
CUSTOMER GROUPS 2015/16 2016/17 2017/18 2018/19
Individuals, personal representatives and trustees for disabled people £11,100 £11,100 £11,300 £11,700
Other trustees £5,500 £5,550 £5,650 £5,850
 

You can use your Annual Exempt Amount against the gains charged at the highest rates to minimise the tax you owe. See the section on ‘Rates for Capital Gains Tax’ below for an example.

Executors & Personal Representatives

If you’re acting as an executor or personal representative for a deceased person’s estate, you may get the full Annual Exempt Amount during the ‘administration period’. The administration period is usually the time it takes to settle the deceased person’s affairs and get a grant of probate (or confirmation in Scotland). You’re entitled to the Annual Exempt Amount for the tax year in which the death occurred and the following two tax years. After that there’s no tax-free allowance against gains during the administration period.

Find out more about death, inheritance and Capital Gains Tax.

Trustees for disabled people

If you’re acting as a trustee for a disabled person you use the higher Annual Exempt Amount above - and not the rate for ‘other trustees’. A disabled person in this context is a person who has mental health problems or receives the middle or higher rate of Attendance Allowance or Disability Living Allowance.

Find out more about Capital Gains Tax and trusts.

People who are 'non-domiciled' in the uk

You won’t get the Annual Exempt Amount if you’re ‘non-domiciled’ in the UK and you’ve claimed the ‘remittance basis’ of taxation on your foreign income and gains. You may be ‘non-domiciled’ in the UK, for example, if you were born in another country and intend to return there. You may have claimed the ‘remittance basis’ if you have income and gains from abroad and have decided that it’s beneficial to be taxed on the foreign income and gains that you bring into the UK, rather than on all income and gains that arise. Issues of domicile and tax on foreign gains are complicated. A lot depends on the facts of each case. You can find out more by following the link below. Or speak to your Tax Office about your specific circumstances.

Read guidance on Residence, domicile and the remittance basis: RDR1.

Telephone or write to HMRC.

Rates for capital gains tax

Tax Years 2013 to 2016
The following Capital Gains Tax rates apply:

  • 18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)

  • 28% for trustees or for personal representatives of someone who has died

  • 10% for gains qualifying for Entrepreneurs’ Relief

  • 28% for Capital Gains Tax on property where the Annual Tax on Enveloped Dwellings is paid - the Annual Exempt Amount is not applicable

  • 20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property) (2015/16)

Tax Years 2016 to 2017
The following Capital Gains Tax rates apply (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first):

  • 10% and 20% tax rates for individuals (not including residential property and carried interest)

  • 18% and 28% tax rates for individuals for residential property and carried interest

  • 20% for trustees or for personal representatives of someone who has died (not including residential property)

  • 28% for trustees or for personal representatives of someone who has died for disposals of residential property

  • 10% for gains qualifying for Entrepreneurs’ Relief

  • 28% for Capital Gains Tax on property where the Annual Tax on Enveloped Dwellings is paid - the Annual Exempt Amount is not applicable

  • 20% for companies (non-resident Capital Gains Tax on the disposal of a UK residential property)

2010 to 2011
For gains on or before 22 June 2010.
Capital Gains Tax is charged at a flat rate of 18%.

For capital gains made from 23 June 2010 to 5 April 2011
The following Capital Gains Tax rates apply to gains after this date:

  • 18% and 28% tax rates for individuals (the tax rate you use depends on the total amount of your taxable income, so you need to work this out first)

  • 28% for trustees or for personal representatives of someone who has died

  • 10% for gains qualifying for Entrepreneurs’ Relief

Find out more about Entrepreneurs’ Relief

2009 to 2010, and 2008 to 2009
Capital Gains Tax is charged at a flat rate of 18%.

 

This information can be found on the Gov.uk website, where you can find in-depth advice about tax rates and guidance.