Capital Gains Tax (CGT)
It’s a tax on gains made on disposing of capital assets, such as shares, selling your business, and property, although your main home is not normally subject to CGT. The first £11,100 of gains you make in a year are exempt from tax. This is known as your annual exemption.
Capital gains are taxed at a higher rate of 20% (28% for residential property and carried interest) for gains where total taxable gains and income are above the income tax basic rate band of£33,500. Below that a 10% (18% for residential property and carried interest) rate is applied.
There are various reliefs available that can reduce this. Most of the legislation regarding capital gains tax is all about the exemptions and how to avoid it, so you often find there are ways around it or ways to lessen its impact.