What are Capital Gains Tax rates in UK?

If you’re wondering what the Capital Gains Tax rates are in the UK this tax year, we’ve broken it down for you, so keep reading!

You need to pay Capital Gains Tax (CGT) when you make a profit from selling valuable assets – this includes:

• Shares
• Cryptocurrencies
• Art
• Property
• Selected antiques
• Fine jewellery

Capital Gains Tax rates in the UK for 2023/24

For the 2023/2024 tax year capital gains tax rates are:

• 10% (18% for residential property) for your entire capital gain if your overall annual income is below £50,270
• 20% (28% for residential property) for your entire capital gain if your overall annual income is above the £50,270 threshold

Individuals now only have a £6,000 capital gains tax allowance. In the 2022/23 tax year, it was £12,300. This means your capital gains up to £6,000 only are tax free.

Normally you don’t have to pay any capital tax on selling your main home.

The rate of CGT differs from income tax rates and largely depends on what asset you are selling – so your shiny jewellery will probably be taxed at a different rate than your second home.

Capital Gains Tax rates

Tax-free allowance

Capital loss

Luckily, if you’ve made a loss by selling your asset, you can report this to HMRC and you may be entitled to tax relief. This is called allowable losses, however, there is a slight catch. You cannot claim allowable losses if:

• You’ve sold or given an asset to a spouse 
• You’ve sold or given an asset to a family member
• You’ve sold or given an asset to a connected person, i.e a business partner or in-laws
• You’ve sold a non-chargeable asset 

Wasting assets

You won’t have to pay Capital Gains Tax on all assets you sell. Assets deemed to have a lifespan of less than 50 years are less likely to incur profit, so they are referred to as wasting assets. This includes:

• Cars
• Natural resources such as coal and natural gas
• Machinery
• Furniture

Business asset disposal relief

When you sell your business or a percentage of your business, you will have to pay Capital Gains Tax. Don’t be disheartened though! You may be entitled to a fixed CGT rate of 10% due to the business asset disposal relief – formerly known as the Entrepreneur’s Relief. 

There are only two requirements to qualify for this reduction; you have to:

• Be a sole trader
• Have owned your business for two years

If you need to quickly see how much tax you need to pay view our capital gains tax calculator.