Capital Gains Tax (CGT) is a tax on the profit made on the disposal of an asset that has increased in value. Whilst most taxpayers are aware of their annual tax-free allowance (currently £12,000) and the exemption for the, qualifying, sale of the family home – there are other items that are exempt from CGT.
- your car
- personal possessions worth up to £6,000 each, such as jewellery, paintings or antiques
- stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs
- UK Government or 'gilt-edged' securities, for example, National Savings Certificates, Premium Bonds and loan stock issued by the Treasury
- betting, lottery or pools winnings
- personal injury compensation
- foreign currency you bought for your own or your family's personal use outside the UK
So, if you are lucky enough to win the National Lottery this weekend, you won’t have to pay any CGT…
None of the above exemptions apply when the gains arise from trading or business activities as distinct from occasional sales and disposals.