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Capital Gains Tax allowance

  • 2 min read

The Capital Gains Tax Allowance is the maximum amount that you can earn in profit (a.k.a capital gains) tax-free. This allowance resets every tax year. You therefore only have to pay Capital Gains Tax (CGT) on your yearly profits that go above this tax-free amount.

Back in the 2023/2024 tax year, the allowance was £6,000. Now, in the 2024/25 tax year, it’s £3,000.

What is Capital Gains Tax?

Capital Gains Tax is a tax that you owe on your investment profits. This can be from a selection of investments. Here are some examples:

  • Property
  • Cryptocurrency (e.g. Bitcoin, Ethereum, XRP)
  • Stocks and shares
  • Fine jewellery
  • Cash inheritance
  • Car

What rate do I pay?

The rate that you pay Capital Gains Tax depends on the asset that you’ve gained profit from. Check out the rates below or use our Capital Gains Tax Calculator.

Type of asset Basic rate Higher rate
Shares 10% 20%
Residential property 18% 24%
Bitcoin/Cryptocurrency 10% 20%
Other 10% 20%

Things to remember about the Capital Gains Tax Allowance

  • If you own the assets (that you just sold) together with another person, you can use both of your allowances together. This means that the collective allowance is £6,000
  • If you don’t use your CGT allowance in a given tax year, you can’t carry it forward to the next year
  • The CGT allowance is not related to your Personal Allowance
    • The Personal Allowance is only for other kinds of earnings (salary, self-employment income, rental income, etc.)

What happens if I make a loss?

If you make a loss after selling an asset, you can deduct this loss from any gains you’ve made from selling other assets in the same year. For example, if you lose £15,000 from selling Bitcoin but make £40,000 from selling Ethereum, you can deduct the £15,000 from the £40,000 to make an overall gain of £25,000.

You then only need to pay Capital Gains Tax on the amount above the £3,000 allowance – £22,000.

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