Is your asset liable to Capital Gains Tax?

Most assets are liable to Capital Gains Tax when you sell or dispose of them. These include shares, property, business assets and personal possessions - whether they're in the UK or overseas. But some assets are exempt – such as your car and, in most cases, your main home.

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Exempt assets - when you don't pay Capital Gains Tax

Some assets aren't liable to Capital Gains Tax at all because they’re exempt. These include:

  • 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

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Assets liable to Capital Gains Tax

Most assets - other than those covered above - are liable to Capital Gains Tax when you sell or dispose of them.

This section lists some of these assets. It also outlines situations when you may not need to pay Capital Gains Tax, even though the asset is usually liable.

Usually if you pay Income Tax on the gain or profit you make from disposing of an asset you won't have to pay Capital Gains Tax on the gain too. For example, if you're trading as a property dealer, jewellery maker or antiques dealer.

If you're unsure whether you should be paying Income Tax or Capital Gains Tax, please contact HM Revenue and Customs (HMRC).

Telephone or write to HMRC

Property - including land, buildings and leases

Most property is liable to Capital Gains Tax. You must work out the gain or loss if you sell or dispose of it.

Types of property liable to Capital Gains Tax include:

  • a second home
  • a property that you've rented out
  • business premises, such as a shop or a farm
  • land, such as agricultural land

However, if you sell your main home - even though the asset is liable to Capital Gains Tax - you may qualify for Private Residence Relief. This may mean there's no tax to pay.

See more about Private Residence Relief on your main home

Find out more about Capital Gains Tax and property

Shares, unit trusts and other investments

Disposals of shares, units in a unit trust and similar investments are liable to Capital Gains Tax. You must work out the gain or loss if you sell or dispose of them.

Investments liable to Capital Gains Tax when you sell or dispose of them include:

  • stocks and shares in a company
  • units in a unit trust
  • debentures, bonds (but not premium bonds) and certain securities - these are generally investments in or loans to a company or to the government

There may be no tax to pay if your shares have been replaced by new shares following a company reorganisation or take-over.

And if you still own shares but they’ve become worthless, or worth next to nothing, you may be able to claim a loss.

More about Capital Gains Tax and shares

What to do if you’ve made a loss

Antiques, jewellery and other personal possessions

Most personal possessions worth more than £6,000 are liable to Capital Gains Tax. This applies to individual possessions and collections or sets worth £6,000 as a whole. You must work out the gain if you sell or dispose of them.

Personal possessions liable to Capital Gains Tax (if they’re worth more than £6,000) include:

  • artwork - such as a painting
  • collectors' items - such as a chess set
  • antiques - such as furniture or jewellery

However, there may be no tax to pay if both of the following apply to the possession:

  • it had an expected useful life of less than 50 years when you got it
  • it hasn’t been used in your trade or job

An example of this might be a caravan or motor-boat you bought and used for pleasure.

Read more about personal possessions and Capital Gains Tax

Business assets - such as business premises 'goodwill' and registered trade mark

Many business assets are liable to Capital Gains Tax. These may be buildings, equipment, fixtures and fittings, or even the business's reputation ('goodwill'). You must work out the gain or loss if you sell or dispose of such business assets.

Some typical business assets liable to Capital Gains Tax include:

  • business premises - such as a shop
  • fixtures and fittings - such as equipment you sell with the premises
  • goodwill – that is the good name or reputation of the business
  • shares in a personal company
  • registered trade mark

However, you may qualify for tax reliefs that reduce the amount of Capital Gains Tax you pay. For example, you may be able to claim Business Asset Roll-Over relief. You can do this if you sell a business asset and re-invest the 'proceeds' (usually the amount you receive) in a new business asset. Or you may be able to claim Entrepreneurs' Relief if you've sold your business or it's ceased trading.

Find out more about business reliefs for Capital Gains Tax

Read more about business assets and Capital Gains Tax

Overseas assets

Overseas assets are liable to Capital Gains Tax if you're 'resident' - in the UK. For example, if you choose to live or work in the UK and do so on a regular basis, you're probably resident here. You are liable on gains arising both in and outside the UK.

Typical overseas assets include:

  • a holiday home abroad
  • shares in a foreign company
  • land overseas bought for development

However, if you're 'resident' in the UK but not 'domiciled' here, you may be able to claim what’s known as the 'remittance basis'. This might perhaps be because you or your father were born abroad, or you plan to live permanently abroad. You're liable on all gains arising in the UK. You'll only be liable on foreign gains when you bring them into (‘remit’ them to) the UK.

Residency, domicile and tax on foreign gains are complicated subjects - a lot depends on the facts of each case. See more in the guidance below or contact HMRC.

Download guidance on residency, domicile and the remittance basis (PDF 560K)

Telephone or write to HMRC

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More useful links

Find out how gifts, inheritance, separation and divorce can affect your Capital Gains Tax

How to report a capital gain

What to do if you’ve made a loss

Your assets - calculating gains, using reliefs

Capital Gains Tax rates and annual tax-free allowances

Capital Gains Tax glossary - some plain English explanations