What is your CGT tax-free allowance?
Each tax year you receive a CGT tax-free allowance or Annual Exempt Amount (AEA).
- For the 2024/25 tax year the allowance is £3,000 for individuals and personal representatives, and £1,500 for most trustees.
Capital Gains Tax
Learn more about Capital Gains Tax and why you don't pay it on your ISA or SIPP investments
Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a Junior ISA will not be possible until the child reaches age 18. You can't normally access money in a pension until age 55 (57 from 2028).
What is Capital Gains Tax?
If you own shares, funds or investment trusts outside of an ISA or pension and you sell those assets for a profit, you may need to pay Capital Gains Tax (CGT).
You're only taxed on the gains you make, not the amount of money you receive from the sale.
And you'll only need to pay tax if your gains for the tax year (6 April to 5 April the following year) - including those made from selling other 'assets' - are more than the annual CGT allowance.
How CGT works
As an example of how CGT works:
You buy shares for £5,000 and hold them in an account other than an ISA or SIPP. You then sell the shares for £20,000, making a gain of £15,000. If this is the only gain you make in the tax year, your taxable amount is £12,000 (your gain minus your tax-free allowance of £3,000). You can also deduct certain costs, such as fees associated with buying and selling shares. Please note, there are different rules for working out the purchase price of some investments when calculating your gain. You can find out more on our Capital Gains Tax reporting tool when you log in to your account.
If you're a basic rate tax payer, the gain you make over the allowance threshold on shares, funds and investment trusts is taxed at 18%. For higher and additional tax bands this rate increases to 24%. Before the Budget on 30 October 2024, the rates were lower, so the amount of CGT you will pay will depend on when you sold the asset.
| Capital Gains Tax rate before 30 October 2024* | Capital Gains Tax rate from 30 October 2024* | |
|---|---|---|
| Basic rate tax payer | 10% | 18% |
| Higher rate tax payer | 20% | 24% |
| Additional rate tax payer | 20% | 24% |
So going back to our example, where the taxable gain is £12,000, as a basic rate tax payer you would pay £1,200 if you sold the asset before 30 October, and £2,160 from 30 October. As a higher rate tax payer you'd pay £2,400 if you sold the asset before 30 October, and £2,880 from 30 October.
But remember, if you're a basic rate tax payer the gain you make, when added to your income, could push you into the higher rate bracket. In this case, you'd pay 24% on however much of the gain falls into the higher income tax band.
*Different CGT rates apply if you're selling a property other than your main home.
Why are my ISA and SIPP investments exempt from CGT?
Individual Savings Accounts (ISAs), Self-Invested Personal Pensions (SIPPs) and their equivalents for children - Junior ISAs and Junior SIPPs - are tax-efficient wrappers. This means that you don't pay tax on any gains from the investments you hold in them.
You can invest up to a certain amount tax-free into these accounts each tax year (6 April to 5 April the following year).
ISA
Invest up to £20,000 in an ISA.
SIPP
Invest up to the value of your earnings in a SIPP (£60,000 limit).
Junior ISA
Invest up to £9,000 in a JISA for your child.
Junior SIPP
Save up to £2,880 in a JSIPP and receive up to £720 in basic tax relief (20%), making a total contribution of £3,600 (for children who aren't earning).
What do you pay Capital Gains Tax on?
You only pay CGT on the gains you make from 'disposing' of shares, funds or investment trusts that are not in an ISA or pension.
'Disposing' of an item includes:
- Selling it
- Giving it away as a gift or transferring it to someone else
- Swapping it for something else
You can also pay CGT on other assets you 'dispose of', including properties that are not your main home and personal possessions worth £3,000 or more (apart from your personal car).
Depending on the asset, you may be able to reduce any tax you pay by claiming a relief.
If you dispose of an asset you jointly own with someone else, you have to pay CGT on your share of the gain. If you're married it's possible to hold assets in joint names and transfer those assets to your spouse or civil partner so that they can use their CGT allowance when you dispose of the asset.
You don't usually pay CGT on gifts to your spouse or qualifying charities.
If you leave something to someone in your will, you will not be liable for CGT on those assets.
Inheritance and CGT
If you inherit an asset and later decide to 'dispose' of it, you could be liable for CGT.
In this instance for calculating CGT the purchase price of the asset depends on its worth when the person who left it died. For more information, you should speak to a tax adviser or HM Revenue & Customs.
For more on receiving an inheritance visit our inheritance section.
CGT reports with Fidelity
You can find out more about your CGT information through our online Capital Gains Tax reporting tool. The tool can generate reports of your realised and unrealised capital gains with Fidelity. These reports should not be solely relied on when completing your tax return but instead should be used as a prompt to help decide if a more detailed look at your capital gains is required.
Please note, if you only hold an ISA and/or SIPP account with us, there won't be any CGT information.
Log in to your online account and select Transactions and Reports from the top of the page and then 'Capital gains reports'.
How to report your CGT
Any gain above your CGT allowance must be reported to HM Revenue & Customs.
You can report your gain:
- in a Self Assessment tax return
- using the ‘real time’ Capital Gains Tax Service on gov.uk
Personal financial advice
If you have more than £100,000 to invest, our financial advisers can help you make the most of your money. Just call us on 0800 222 550 for a free, no-obligation discussion about your needs.
Capital Gains Tax FAQs
Important information - this information is not a personal recommendation in respect of a particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity's advisers or an authorised financial adviser of your choice. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.
