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Your total capital gains tax (CGT) owed depends on two main components:
Your overall earnings determine how much of your capital gains are taxed at 10% or 20%.
Our capital gains tax rates guide explains this in more detail.
In your case where capital gains from shares were £20,000 and your total annual earnings were £69,000:
You pay no CGT on the first £12,300 that you make
You pay £127 at 10% tax rate for the next £1,270 of your capital gains
You pay £1,286 at 20% tax rate on the remaining £6,430 of your capital gains
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:
As you can see from using the calculator, you pay different rates depending on what you’re selling. Check them out here 👇
|Type of asset||Basic rate||Higher rate|
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:
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:
Read more about the CGT changes.
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