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Capital gains tax explained

Capital gains is a tax on the profit when you sell or dispose of something that’s increases in value. It is the gain you make that is taxed, not the amount of money you receive. Some assets are tax free. Each year, everyone who is liable to capital gains tax gets an annual tax-free allowances known as the annual exempt amount. You only really pay capital gains tax if your overall gains for the year are above the amount.

 

How does capital gains tax work?

 

  • Just like income tax, capital gains are calculated on a yearly basis.
  • Costs or reliefs than can reduce or defer the gains.
  • Losses you made by selling assets that would normally be liable for the opposite of a capital gain.

 

If your total gains, minus these deductions, comes to more than your annual allowance. Capital gains tax loans are available from a range of providers.

 

That still leaves many key assets liable for UK capital gains tax when held outside of an ISA, including:

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The Business Blog is the hub of all information about business, an entrepreneur by trade, Skye loves nothing more than helping others grow their businesses.