1. What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax on the profit when you sell (or 'dispose of') something (an 'asset') that's increased in value. It's the gain you make that's taxed, not the amount of money you receive.

2. How Does the Calculator Work?

The calculator uses the Quilter CGT formula:

Where:

• \( Gain \) — The profit made from the sale of the asset (GBP)
• \( Allowance \) — The annual tax-free allowance (GBP)
• \( Rate \) — The applicable tax rate (%)

Explanation: The equation calculates tax only on gains above your annual allowance, at your applicable tax rate.

3. Importance of CGT Calculation

Details: Accurate CGT estimation is crucial for financial planning, tax reporting, and understanding your liabilities when disposing of assets.

4. Using the Calculator

Tips: Enter your total gain in GBP, your annual CGT allowance in GBP, and the applicable tax rate as a percentage. All values must be valid (positive numbers, rate between 0-100).

5. Frequently Asked Questions (FAQ)

Q1: What is the current CGT allowance?
A: For 2023/24, the annual exempt amount is £6,000 for individuals (£3,000 for trusts).

Q2: What are the CGT rates?
A: For individuals, basic rate taxpayers pay 10% (18% on residential property), higher rate taxpayers pay 20% (28% on residential property).

Q3: When is CGT payable?
A: CGT is normally due by 31 January following the end of the tax year in which the gain was made.

Q4: What assets are subject to CGT?
A: Most personal possessions worth £6,000 or more, property that's not your main home, shares, and business assets.

Q5: Are there any reliefs available?
A: Yes, including Private Residence Relief, Business Asset Disposal Relief, and Gift Hold-Over Relief in certain circumstances.