Question 1

What is the Capital Gains Tax annual exempt amount for 2024/25?

Accepted Answer

For the 2024/25 tax year, the Capital Gains Tax (CGT) annual exempt amount is £3,000. This is the amount of capital gains you can make each year before you need to pay any CGT.

This is a significant reduction from previous years:

Tax Year  Annual Exempt Amount

2022/23  £12,300 
 2023/24  £6,000 
 2024/25  £3,000

Key rules about the annual exempt amount:

It applies per person, so a married couple can have a combined exemption of £6,000 if both dispose of assets.
 It cannot be carried fo

Question 2

What are the CGT rates for property compared to other assets?

Accepted Answer

Capital Gains Tax (CGT) rates in the UK depend on two factors: the type of asset you are disposing of and your income tax band. For the 2024/25 tax year, the rates are as follows:

CGT rates on residential property (e.g. buytolet, second homes):

Tax Band  Rate

Basic rate taxpayer  18% 
 Higher/additional rate taxpayer  24%

CGT rates on other assets (e.g. shares, personal possessions, business assets):

Tax Band  Rate

Basic rate taxpayer  10% 
 Higher/additional rate taxpayer  20%

Ho

Question 3

How does Principal Private Residence Relief (PPR) work for CGT?

Accepted Answer

Principal Private Residence Relief (PPR) is one of the most valuable tax reliefs available in the UK. It exempts all or part of the gain on your main home from Capital Gains Tax when you sell it.

When does full PPR apply?

You get full relief (no CGT to pay) if the property has been your only or main home for the entire period you owned it. You must have:

Lived in it as your main home throughout your ownership.
 Not used any part of it exclusively for business.
 The grounds (garden) must not

Question 4

What is the Bed and ISA strategy for CGT efficiency?

Accepted Answer

Bed and ISA is a tax planning strategy where you sell investments held in a taxable account (such as a general investment account) and immediately repurchase the same investments inside an ISA (Individual Savings Account). This shelters future growth and income from tax.

How it works:

1. Sell shares or funds in your taxable general investment account.
2. Transfer the cash into your Stocks and Shares ISA.
3. Repurchase the same (or similar) investments inside the ISA.

Once inside the ISA, all

Question 5

How does Business Asset Disposal Relief (BADR) affect Capital Gains Tax?

Accepted Answer

Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs' Relief, is a significant relief under Capital Gains Tax (CGT) designed to encourage investment and entrepreneurship. It reduces the CGT rate payable on the disposal of qualifying business assets.

The Relief Mechanism

When BADR applies, the lifetime limit for gains qualifying for the relief is USD 1 million. Any qualifying gains up to this limit are taxed at a reduced rate of 10%, regardless of the individual's standard in

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Capital Gains Tax Questions & Answers

What is the Capital Gains Tax annual exempt amount for 2024/25?

What are the CGT rates for property compared to other assets?

How does Principal Private Residence Relief (PPR) work for CGT?

What is the Bed and ISA strategy for CGT efficiency?

How does Business Asset Disposal Relief (BADR) affect Capital Gains Tax?