Taxation of Chargeable Gains Act 1992

3 Annual exempt amount.U.K.

(1)An individual shall not be chargeable to capital gains tax in respect of so much of his taxable amount for any year of assessment as does not exceed the exempt amount for the year.

[F1(1A)Subsection (1) does not apply to an individual for a tax year if section 809B of ITA 2007 (claim for remittance basis to apply) applies to the individual for that year.]

[F2(2)The exempt amount for a tax year is [F3£10,600].]

[F4(3)If there is a relevant increase in [F5CPI] in relation to a tax year—

(a)the exempt amount is to be increased in accordance with Steps 1 and 2, and

(b)subsection (2) has effect from then on (for that and subsequent tax years) as if it referred to the increased amount,

unless Parliament otherwise determines.

(3A)There is a relevant increase in [F6CPI] in relation to a tax year if the [F7consumer prices index] for the September before the start of the tax year is higher than it was for the previous September.

(3B)Steps 1 and 2 are—

  • Step 1 Increase the exempt amount for the previous tax year by the same percentage as the percentage of the relevant increase in [F8CPI].

  • Step 2 If the result of Step 1 is not a multiple of £100, round it up to the nearest multiple of £100.

(4)If there is a relevant increase in [F9CPI] in relation to a tax year, the Treasury must before the start of that tax year make an order showing the amount arrived at as a result of Steps 1 and 2.]

[F10(5)For the purposes of this section an individual’s taxable amount for any year of assessment is the amount [F11which] is (apart from this section) the amount for that year on which that individual is chargeable to capital gains tax in accordance with section 2.

(5A)Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment is equal to or less than the exempt amount for that year, no deduction shall be made for that year in respect of—

(a)any allowable losses carried forward from a previous year; or

(b)any allowable losses carried back from a subsequent year in which the individual dies.

(5B)Where, in the case of any individual, the amount of the adjusted net gains for any year of assessment exceeds the exempt amount for the year, the deductions made for that year in respect of allowable losses falling within subsection (5A)(a) or (b) above shall not be greater than the excess.

(5C)In subsections (5A) and (5B) above the references, in relation to any individual’s case, to the adjusted net gains for any year are references to the amount given in his case by—

(a)taking the amount for that year from which the deductions for which section 2(2)(a) and (b) provides are to be made;

[F12(aa)if section 16ZB (certain chargeable gains charged on remittance basis) applies for that year, deducting the amount of the relevant gains (within the meaning of that section),]

(b)deducting [F13(from the amount mentioned in paragraph (a), as reduced under paragraph (aa))] only the amounts falling to be deducted in accordance with section 2(2)(a); and

(c)[F14if section 2(4) applies for that year,], adding whichever is the smaller of the exempt amount for that year and the amount [F15mentioned in section 2(4)(b)(ii)].]

F16(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)For the year of assessment in which an individual dies and for the next 2 following years, [F17subsections (1) to (5C)] above shall apply to his personal representatives as they apply to an individual.

[F18(7A)As they apply by virtue of subsection (7) above—

(a)subsection (5A) has effect with the omission of paragraph (b), and

(b)subsection (5B) has effect with the omission of the words “or (b)”.]

(8)Schedule 1 shall have effect as respects the application of this section to trustees.

Textual Amendments

F1S. 3(1A) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 56(2)

F2S. 3(2) substituted (with effect in accordance with s. 8(4) of the amending Act) by Finance Act 2011 (c. 11), s. 8(2)

F3Words in s. 3(2) substituted (for the tax year 2012-13 and subsequent tax years in accordance with s. 34(5) of the amending Act) by Finance Act 2012 (c. 14), s. 34(2)

F4S. 3(3)(3A)(3B)(4) substituted for s. 3(3)(4) (with effect in accordance with s. 8(6) of the amending Act) by Finance Act 2011 (c. 11), s. 8(3)

F5Word in s. 3(3) substituted (for the tax year 2013-14 and subsequent tax years in accordance with s. 34(7) of the amending Act) by Finance Act 2012 (c. 14), s. 34(3)(a)

F6Words in s. 3(3A) substituted (for the tax year 2013-14 and subsequent tax years in accordance with s. 34(7) of the amending Act) by Finance Act 2012 (c. 14), s. 34(3)(a)

F7Words in s. 3(3A) substituted (for the tax year 2013-14 and subsequent tax years in accordance with s. 34(7) of the amending Act) by Finance Act 2012 (c. 14), s. 34(3)(b)

F8Words in s. 3(3B) substituted (for the tax year 2013-14 and subsequent tax years in accordance with s. 34(7) of the amending Act) by Finance Act 2012 (c. 14), s. 34(3)(a)

F9Words in s. 3(4) substituted (for the tax year 2013-14 and subsequent tax years in accordance with s. 34(7) of the amending Act) by Finance Act 2012 (c. 14), s. 34(3)(a)

F10S. 3(5)(5A)(5B)(5C) substituted for s. 3(5) (with effect in accordance with s. 121(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 21 para. 3

F11Word in s. 3(5) substituted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 26(2)

F12S. 3(5C)(aa) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 56(3)(a)

F13Words in s. 3(5C)(b) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 56(3)(b)

F14Words in s. 3(5C)(c) substituted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 26(3)(a)

F15Words in s. 3(5C)(c) substituted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 26(3)(b)

F16S. 3(6) repealed (with application in accordance with Sch. 28 para.7 of the amending Act) by Finance Act 2003 (c. 14), Sch. 28 para. 3(2), Sch. 43 Pt. 3(7)

F17Words in s. 3(7) substituted (with application in accordance with Sch. 28 para.7 of the amending Act) by Finance Act 2003 (c. 14), Sch. 28 para. 3(3)

F18S. 3(7A) inserted (retrospectively) by Finance Act 2003 (c. 14), Sch. 28 paras. 3(4), 8

Modifications etc. (not altering text)

C1S. 3 amended (for the year 1993-1994) by S.I. 1993/760, art. 2

S. 3 modified (for the year 1993-1994) by 1993 c. 34, s. 82

C2S. 3 excluded (22.7.2004) by Finance Act 2004 (c. 12), s. 109(2)(b)

C3S. 3(2) sum amended (for the year 1994-95) by Finance Act 1994 (c. 9), s. 90

C7S. 3(2) sum amended (for the year 1999-2000) by The Capital Gains Tax (Annual Exempt Amount) Order 1999 (S.I. 1999/591), art. 2

C14S. 3(3) excluded (for the tax year 2011-12) by Finance Act 2011 (c. 11), s. 8(5)

C15S. 3(3) excluded (for the tax year 2012-13) by Finance Act 2012 (c. 14), s. 34(6)