Taxation of Chargeable Gains Act 1992 section 4

Rates of capital gains tax

Section 4 establishes the rates at which capital gains tax (CGT) is charged on individuals, personal representatives, and trustees, and explains how the applicable rate depends on the nature of the gain and the taxpayer's income tax position.

• CGT is charged at different rates depending on whether the gain relates to residential property or other assets, and whether the taxpayer is a basic rate or higher/additional rate income tax payer.
• For gains falling within the taxpayer's unused basic rate income tax band, lower CGT rates apply; gains above that band are taxed at higher rates.
• The unused basic rate band is calculated by deducting the individual's taxable income (after personal allowances) from the basic rate band limit for the relevant tax year.
• Trustees and personal representatives are generally charged at the higher CGT rates applicable to gains exceeding the basic rate band.

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