Capital Gains Tax Allowance

[ˈkæpɪtl ɡeɪnz tæks əˈlaʊəns]

Term

Summary:

Capital Gains Tax Allowance allows taxpayers to earn £6000 of tax-free Capital Gains from the sale of assets for the 2023/24 tax year.

More detail:

The Capital Gains Tax Allowance is an annual allowance provided by the UK government that allows taxpayers to earn a certain amount of tax-free gains on the sale of assets.

For the 2023/2024 tax year, the allowance is £6000. This is down from the £12,300 allowance in the previous tax year.

You pay a higher tax rate on Capital Gains if you are in the upper two brackets of Income Tax. However, unlike the Personal Allowance, you do not lose your Capital Gains Tax Allowance with higher income.

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