Capital Gains Tax: The below information is correct as at the publish date of this article.
General overview
Capital gains tax is chargeable on gains made on the disposal of certain assets, in which a disposal can be by way of sale or gift.
Previous rates
Any disposals that took place between March 2024 and 30 October 2024 will be chargeable at the below rates:
- 10% – applies to any part of a gain that falls within your unused basic rate tax band (excluding residential property)
- 18% – applies to any part of a gain on residential property that falls within your unused basic rate tax band
- 20% applies to any part of a gain above your unused basic rate tax band (excluding residential property)
- 24% – applies to any part of a gain on residential property above your unused basic rate tax band.
New rates
From 30 October 2024, gains on the sale of assets have increased to be in line with the rates chargeable on residential property. The new rates are:
- 18% – applies to any part of a gain that falls within your unused basic rate tax band (excluding residential property)
- 18% – applies to any part of a gain on residential property that falls within your unused basic rate tax band
- 24% applies to any part of a gain above your unused basic rate tax band (excluding residential property)
- 24% – applies to any part of a gain on residential property above your unused basic rate tax band.
Reliefs
One of the main reliefs available for capital gains tax is Business Asset Disposal relief, which is available on the sale of business assets.
Where Business Asset Disposal Relief is claimed, a capital gains tax rate of 10% applies, up to the lifetime limit of £1 million.
From 6 April 2025, the 10% Business Asset Disposal Relief rate will increase to 14%, and will again increase to 18% from 6 April 2026.
Capital Gains Tax is a complex area so if you require any help to determine your potential tax liability or would like to discuss tax planning arrangements, please visit our contact us page.
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