Capital Gains Tax rates 2022/23 – how much do you have to pay?

“What are the Capital Gains Tax rates 2022/23?” It’s question that a number of clients have asked us recently, so we thought it would be a good idea to answer it on this blog.

Back in 2008, Capital Gains Tax was much simpler. It was charged at a flat rate of 18%.

Then, from 2010, things got complex. The amount you paid depended on whether you were an individual, a trustee or personal representative of someone who had died. If you were an individual, the Capital Gains Tax rate you paid depended on the total amount of your taxable income.

Over the years, different Capital Gains tax rules have been introduced, changed or withdrawn. So, unsurprisingly, when we look at the Capital Gains Tax rates 2022/23, the amount you have to pay will vary depending on your circumstances.

What are the individual Capital Gains Tax rates 2022/23?

First of all, let’s take a look at Capital Gains Tax on property. If you sell your main home, you don’t normally pay CGT (unless you have let it out, used it for business or it is very large). However, if you sell another property – such as a buy-to-let house or apartment – you have to pay CGT on it.

If you are a higher or additional rate taxpayer, you need to pay:

• 28% on gains from the sale of residential property.

If you are a basic rate taxpayer, things get more complicated. In a nutshell, if your taxable income plus your taxable gains from the property sale remain within the basic Income Tax band, you’ll pay 20%. If the gains push you into the higher rate Income Tax band, you’ll pay 28%.

These figures apply to the sale of residential property. However, it’s important to remember that CGT is also payable on ‘chargeable assets’. These include:

• Most personal possessions worth more than £6,000, excluding your car
• Shares that aren’t in an ISA or PEP

When you dispose of chargeable assets, you will pay 20% Capital Gains Tax if you are a higher or additional rate taxpayer. Again, if the taxable gains plus your income remain in the basic rate Income Tax band, you’ll pay less – 10%. If the gains push you into the higher tax band, you pay 20%.

Capital Gains Tax rates 2022/23 for trustees

If you are a trustee or the personal representative of someone who has died, the CGT rates are a bit simpler. You’ll pay:

• 28% on residential property
• 20% on chargeable assets.

What about CGT allowances and reliefs?

This is where CGT gets fiendishly complex, and is why it’s always a good idea to talk to a tax specialist like THP Accountants. We will cover CGT reliefs in detail in a forthcoming blog post, focusing particularly on the different Annual Exempt Amount (AEA) you may be able to claim as an individual, trustee or executor.

What are the CGT rates for business?

This is also a complex area, requiring knowledge of Business Asset Disposal Relief (formerly known as Entrepreneur’s Relief). We’ll also cover this in the near future, but if your business qualifies for Business Asset Disposal Relief, you’ll pay 10% on capital gains.

How do I keep my CGT bills low?

Talk to us! Our CGT experts have detailed knowledge of all Capital Gains Tax reliefs and exemptions. We’d be happy to advise you and do all we can to make sure you don’t pay more CGT than is necessary.