CGT Allowance 2023/24 – £6,000 Limit, Rates and Rules

The Capital Gains Tax annual exempt amount for the 2023/24 tax year stands at £6,000 per person, representing a 50% reduction from the previous year’s allowance. This threshold determines how much profit individuals can realize from selling assets before HMRC charges tax on the gains.

The contraction of the allowance, effective from 6 April 2023 to 5 April 2024, affects anyone disposing of shares, investment properties, or other chargeable assets outside of tax-exempt wrappers. Understanding the exact threshold and how it interacts with applicable tax rates proves essential for accurate Self Assessment filings.

What is the CGT Allowance for 2023/24?

• The £6,000 allowance applies to total net gains across all chargeable asset disposals
• Unused portions expire on 5 April and cannot be carried forward to future tax years
• Each individual receives their own exemption, calculated separately for Self Assessment
• The allowance sits atop the income tax personal allowance without interaction
• Trustees receive £3,000, exactly half the standard individual rate
• Married couples may effectively combine allowances through inter-spousal transfers
• The exemption applies before calculating any available reliefs or allowable losses

How Has the CGT Allowance Changed Recently?

The Autumn Statement Reduction

Chancellor Jeremy Hunt announced the £6,000 threshold in the November 2022 Autumn Statement, implementing an immediate 50% cut from the longstanding £12,300 figure. Policy documents confirm this reduction took effect from April 2023.

Further Reductions Planned

The Spring Budget 2024 subsequently legislated a further reduction to £3,000 for the 2024/25 tax year. Moore South analysis indicates this lower threshold will remain frozen through 2025/26, significantly narrowing the tax-free window for investment returns.

Who Qualifies for the CGT Allowance and How Does It Work?

Individual Taxpayers

Every UK resident individual receives a separate £6,000 annual exempt amount. HMRC guidance confirms this applies to personal representatives of estates as well as living taxpayers.

Married Couples and Civil Partners

No joint allowance exists. Each spouse or civil partner claims their own £6,000 exemption. Transfers between spouses occur at no gain/no loss, enabling strategic distribution of assets to utilize both allowances before disposal.

Trustees and Personal Representatives

Most trusts and settlements receive £3,000 for the 2023/24 period, exactly half the individual rate. Ross Martin notes this trust allowance drops to £1,500 from April 2024.

Chargeable Assets and Exemptions

CGT applies to profits from selling shares outside ISAs, cryptocurrency, business assets, personal possessions worth over £6,000, and second homes. The family home qualifies for Private Residence Relief and remains exempt. Cars, ISA investments, and chattels under £6,000 also fall outside the charge.

What Are the CGT Rates After the Allowance for 2023/24?

Standard Asset Rates

Gains on shares, cryptocurrencies, and most personal possessions attract 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers. Shorthouse Martin confirms trustees pay 20% on these assets.

Residential Property Rates

Non-exempt property gains—including second homes and buy-to-let investments—face higher rates of 18% for basic rate taxpayers and 28% for higher rate taxpayers. Carried interest attracts identical rates.

Business Asset Disposal Relief

Qualifying business disposals benefit from a 10% rate regardless of the taxpayer’s income band, subject to lifetime limits.

How Has the CGT Allowance Evolved Over Time?

1. 2021/22: £12,300 individual allowance maintained — Taxcafe
2. 2022/23: £12,300 frozen for second consecutive year — Your Company Formations
3. 2023/24: £6,000 halved per Autumn Statement 2022 — HMRC
4. 2024/25: £3,000 reduced again per Spring Budget 2024 — Taxcafe
5. 2025/26: £3,000 frozen until potential policy review — Taxcafe

What Is Certain and Uncertain About CGT Rules?

Why Did the CGT Allowance Change in 2023/24?

The reduction formed part of broader fiscal measures announced in the November 2022 Autumn Statement, with the Treasury seeking to broaden the tax base while maintaining headline income tax rates. The policy specifically targets investment gains rather than earned income.

For investors, the halving of the allowance means more frequent reporting obligations. Those realizing modest gains from Best savings accounts or investment portfolios must now track disposals more carefully to avoid breaching the lower threshold.

What Do Official Sources Say About CGT?

Work out your gain for each asset you have disposed of. Deduct the annual exempt amount and any allowable losses. Apply the tax rates based on your income tax band.

— HM Revenue & Customs

What Should Taxpayers Remember About the 2023/24 CGT Allowance?

The 2023/24 tax year introduced a £6,000 annual exemption for capital gains, sharply reduced from the previous £12,300 threshold. Individuals must calculate gains across all chargeable assets, apply the appropriate 10%, 18%, 20%, or 28% rates depending on asset type and income level, and report liabilities through Self Assessment by 31 January 2025. Those affected by Cost of living allowance updates should note that CGT reductions represent a permanent structural change rather than a temporary measure.

Frequently Asked Questions