Capital gains tax (CGT) is a tax on the chargeable gains of individuals, personal representatives and trustees. Most of the basic CGT rules apply to companies as well, but there are some important differences, and a company's gains are charged to corporation tax and not CGT. The law was consolidated in the Taxation of Chargeable Gains Act 1992 but has been substantially amended since then.
Every individual has an annual exemption each tax year which reduces the amount of chargeable gains subject to tax. This is £11,100 for 2015/16. Individuals pay CGT at a rate of 18% or 28% depending on their level of taxable income. Entrepreneurs' relief allows up to £10m (lifetime maximum)of gains on qualifying business disposals to be taxed at a rate of 10%.
Specific reliefs, which either reduce the CGT liability or defer it, are available: