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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 2022/2023 tax year, the allowance was £12,300. Now, in the 2023/24 tax year, it’s £6,000.
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:
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|
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 £6,000 allowance – £19,000.
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