Capital Gains Tax in the UK
Capital gains tax, or CGT, is a tax on the profits or gains you make when you sell or dispose of an asset. Generally, the house you live in is exempt.
Nearly everyone in the UK is entitled to an annual tax-free allowance for CGT. If your overall gains for the tax year exceed the annual exemption limit, you pay CGT on the excess. If your overall gains are below the annual exemption limit, you won’t have to pay any CGT for that year.
The rate of CGT payable on disposals after 22 June 2010 is 28%, but only to the extent that gains exceed the basic rate band limit – £37,400 for 2010–11; otherwise the rate is 18%.