The annual exemption for individuals is currently £12,000. From 6 April 2020, this will increase to £12,300. A husband and wife each have a separate exemption. Same-sex couples who acquire a legal status as civil partners are treated in the same way as married couples for CGT purposes.
The annual exempt amount is increased annually to keep pace with inflation in-line with rises in the Consumer Prices Index. Most trusts have an annual exemption of £6,000 (increasing to £6,150 in 2020-21). Where the remittance basis is claimed by a non-UK domiciled individual, the taxpayer is not entitled to the annual exemption. There are special rules for gains that qualify for Entrepreneur’s relief and / or Investor’s relief.
CGT is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain they may only be subject to a reduced rate of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT. A higher rate of CGT applies (18% and 28%) to gains on the disposal of residential property (apart from a principal private residence).
The usual due date for paying any CGT owed to HMRC is the 31 January following the end of the tax year in which the capital gain was made. From 6 April 2020, this will change for any CGT due on the sale of a residential property by a UK resident. The sale will need to be reported and any CGT due paid within 30 days of the completion of the sale transaction.