Using Your CGT Allowance
The annual Capital Gains Tax exempt amount is down to £3,000. Here is how to make the most of what remains.
Capital Gains Tax (CGT) is charged on the profit when you sell an asset that has increased in value. For investments, the annual exempt amount — the amount of gain you can make before paying any CGT — is now just £3,000 per tax year, down from £12,300 in 2022/23.
Current CGT rates for investments
| Tax band | CGT rate on investments | Effective from |
|---|---|---|
| Basic rate | 18% | 30 October 2024 |
| Higher rate | 24% | 30 October 2024 |
| Additional rate | 24% | 30 October 2024 |
Gains within your ISA or pension are completely exempt — CGT only applies to assets held outside these wrappers.
1. Use your allowance every year
The £3,000 allowance cannot be carried forward. Each year, consider crystallising gains up to £3,000 by selling some of your profitable holdings. You can then rebuy them (outside the 30-day window to avoid the matching rules, or immediately inside an ISA).
2. Offset gains with losses
Capital losses can be offset against capital gains in the same tax year. If you have holdings sitting at a loss, selling them to crystallise those losses can wipe out gains elsewhere. Losses can also be carried forward to future years if you report them to HMRC within four years.
Crystallising a loss does not mean you have to permanently sell. You can sell at a loss and rebuy the same investment after 30 days — or immediately inside an ISA — to maintain your exposure while locking in the tax benefit.
3. Transfer assets to a spouse or civil partner
Transfers between spouses and civil partners living together are CGT-free. This means you can transfer assets to use your partner's annual exempt amount and potentially their lower tax rate. A couple can realise £6,000 of gains per year tax-free (£3,000 each).
4. Prioritise moving investments into an ISA
With the CGT allowance now so small, the priority for anyone with significant investments outside an ISA should be moving them in via a Bed and ISA as quickly as possible. Once inside, gains are permanently sheltered.
CGT must be reported and paid within 60 days for residential property gains. For other assets, it is reported through Self Assessment with the January 31st deadline.
This guide is for informational purposes only and does not constitute financial advice. Tax rules can change. Always check current HMRC guidance or consult a qualified financial adviser before making decisions.