What is Capital Gains Tax? 

Use our Capital Gains Tax calculator to work out what tax you owe on your investment profits. Capital Gains Tax is basically a tax that you’re charged on money you make from selling an asset. When we say asset, this can mean any of the following:

• Property
• Jewellery
• Vintage cars
• Cryptocurrency
• Stocks and shares
• And more!

As you can see from using the calculator, you pay different rates depending on what you’re selling. Check them out here 👇

When do I owe CGT?

After selling an asset, you only owe Capital Gains Tax on profits above £12,300. Anything less than that is tax-free. When you earn more than £12,300 during a tax year, you will need to declare it to HMRC and file a tax return. Make sure you do this by 31st January the tax year after you profit.

In practice, here are the deadlines to be aware of:

• You make £70,000 profit from selling a vintage car in June 2020
• This is the 2020/21 tax year
• Register for Self Assessment to declare the income by 5th October 2021
• Pay tax on your profit by 31st January 2022

2020 Capital Gains Tax changes 

If you sell a residential property, you now need to declare your profits within 30 days and pay any tax you owe. This rule has been in place since 6th April 2020. If you don’t do this, you could face a fine from HMRC. Be aware that this includes both UK residents and those who own UK property but live abroad. Take a look at the following exceptions to these changes:

• The legally binding contract for the sale was made before 6th April 2020
• You’re eligible for full private residence relief
• You sold the property to your spouse or civil partner
• The profit you made was within your tax free allowance 
• You sold the property for a loss
• The property is outside the UK

Read more about the CGT changes.