Capital gains tax is a tax charged on profit when you sell or ‘dispose of’ an asset that has increased in value. Disposing of an asset can include giving it away as a gift or swapping it for something else.
Everybody receives a tax-free allowance of £6,000 for capital gains tax, reducing to £3,000 in 2024/25. Any profits under this amount will not be taxed. The rate of capital gains tax is either 10% or 20%, depending on whether you pay basic-rate or higher-rate income tax. However, these amounts increase to 18% and 28% for capital gains made on residential property that doesn’t fall under ‘private residence relief’.