Capital gains tax ('CGT') is charged on the gain made on the sale of certain assets.
The rate of tax paid on the gain will depend on whether you are a basic rate taxpayer or a higher or additional rate taxpayer. The rates also differ between private individuals and trustees.
The CGT allowance for the 2020/21 tax year is £12,300 for individuals, and £6,150 for trustees (up from £12,000 and £6,000 respectively in the 2019/20 tax year).
From 6 April 2020, revised reporting requirements came in for UK resident individuals or trustees disposing of UK residential property. These set out that upon disposing of a UK residential property, a CGT return must be submitted to HMRC within 30 days of completion, together with the CGT payable. A disposal does not, however, need to be reported if the capital gain is fully covered by Principle Private Residence Relief.
Thought of as one of the 'fairer' taxes, being a tax on profit, perhaps makes it subject to scrutiny and review as the Treasury is now looking into whether the tax is too low.
This is being reviewed as part of a larger scale review being undertaken by the Office for Tax Simplification which is also considering reforms to inheritance tax legislation.
The Chancellor of the Exchequer, Rishi Sunak has announced a review of Capital Gains Tax (CGT). The Chancellor has asked the Office for Tax Simplification (OTS) to review whether the tax is too low, in comparison to income tax rates.