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 £11,100].]

[F4 (3) If there is a relevant increase in [F5 CPI] 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 [F6 CPI] in relation to a tax year if the [F7 consumer 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 [F8 CPI].

• 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 [F9 CPI] 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 [F11 is (what would apart from this section be) the total of the amounts for that year on which that individual is chargeable to capital gains tax in accordance with either (or both) of—

(a) section 2 (gains, other than ATED-related gains and NRCGT gains, chargeable to capital gains tax), and

(b) section 14D (NRCGT gains chargeable to capital gains tax).]

(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.

[F12 (5BA) In this section, “adjusted net gains”, in relation to a tax year and an individual, means—

(a) if the residence condition is met (see section 2(1A)) and the year is not a split year as respects the individual, the section 2 adjusted net gains;

(b) if the residence condition is not met, the section 14D adjusted net gains;

(c) if the residence condition is met and the year is a split year as respects the individual, the total of the section 2 adjusted net gains (if any) and the section 14D adjusted net gains (if any).]

(5C) [F13 In subsection (5BA) “section 2 adjusted net gains”, in relation to an individual and a tax year, means the amount given in the individual's 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;

[F14 (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 [F15 (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) [F16 if section 2(4) applies for that year,], adding whichever is the smaller of the exempt amount for that year and the amount [F17 mentioned in section 2(4)(b)(ii)].]

[F18 (5D) In subsection (5BA) “section 14D adjusted net gains”, in relation to an individual and a tax year, means the amount given in the individual's case by—

(a) taking the amount from which the deductions provided for by paragraphs (a) and (b) of subsection (2) of section 14D are to be made, and

(b) deducting only the amounts falling to be deducted in accordance with paragraph (a) of that subsection.]

F19 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) For the year of assessment in which an individual dies and for the next 2 following years, [F20 subsections (1) to [F21 (5D)]] above shall apply to his personal representatives as they apply to an individual.

[F22 (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

F1 S. 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)

F2 S. 3(2) substituted (with effect in accordance with s. 8(4) of the amending Act) by Finance Act 2011 (c. 11), s. 8(2)

F3 Sum in s. 3(2) substituted (for the tax year 2015-16) by Finance Act 2014 (c. 26), s. 9(1)

F4 S. 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)

F5 Word 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)

F6 Words 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)

F7 Words 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)

F8 Words 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)

F9 Words 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)

F10 S. 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

F11 Words in s. 3(5) substituted (with effect in accordance with Sch. 7 para. 60 of the amending Act) by Finance Act 2015 (c. 11), Sch. 7 para. 5(2)

F12 S. 3(5BA) inserted (with effect in accordance with Sch. 7 para. 60 of the amending Act) by Finance Act 2015 (c. 11), Sch. 7 para. 5(3)

F13 Words in s. 3(5C) substituted (with effect in accordance with Sch. 7 para. 60 of the amending Act) by Finance Act 2015 (c. 11), Sch. 7 para. 5(4)

F14 S. 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)

F15 Words 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)

F16 Words 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)

F17 Words 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)

F18 S. 3(5D) inserted (with effect in accordance with Sch. 7 para. 60 of the amending Act) by Finance Act 2015 (c. 11), Sch. 7 para. 5(5)

F19 S. 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)

F20 Words 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)

F21 Word in s. 3(7) substituted (with effect in accordance with Sch. 7 para. 60 of the amending Act) by Finance Act 2015 (c. 11), Sch. 7 para. 5(6)

F22 S. 3(7A) inserted (retrospectively) by Finance Act 2003 (c. 14), Sch. 28 paras. 3(4), 8

Modifications etc. (not altering text)

C1 S. 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

C2 S. 3 excluded (22.7.2004) by Finance Act 2004 (c. 12), s. 109(2)(b)

C3 S. 3(2) sum amended (for the year 1994-95) by Finance Act 1994 (c. 9), s. 90

C4 S. 3(2) sum amended (for the year 1996-97) by The Capital Gains Tax (Annual Exempt Amount) Order 1995 (S.I. 1995/3033), art. 2

C5 S. 3(2) sum amended (for the year 1997-98) by The Capital Gains Tax (Annual Exempt Amount) Order 1996 (S.I. 1996/2957), art. 2

C6 S. 3(2) sum amended (for the year 1998-99) by The Capital Gains Tax (Annual Exempt Amount) Order 1998 (S.I. 1998/757), art. 2

C7 S. 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

C8 S. 3(2) sum amended (for the year 2000-01) by The Capital Gains Tax (Annual Exempt Amount) Order 2000 (S.I. 2000/808), art. 2

C9 S. 3(2) sum amended (for the year 2001-02) by The Capital Gains Tax (Annual Exempt Amount) Order 2001 (S.I. 2001/636), art. 2

C10 S. 3(2) sum amended (for the year 2002-03) by The Capital Gains Tax (Annual Exempt Amount) Order 2002 (S.I. 2002/702), art. 2

C11 S. 3(2) sum amended (for the year 2003-04) by The Capital Gains Tax (Annual Exempt Amount) Order 2003 (S.I. 2003/842), art. 2

C12 S. 3(2) sum amended (for the year 2005-06) by The Capital Gains Tax (Annual Exempt Amount) Order 2005 (S.I. 2005/721), art. 2

C13 S. 3(2) sum amended (for the year 2007-08) by The Capital Gains Tax (Annual Exempt Amount) Order 2007 (S.I. 2007/942), art. 2

C14 S. 3(3) excluded (for the tax year 2011-12) by Finance Act 2011 (c. 11), s. 8(5)

C15 S. 3(3) excluded (for the tax year 2012-13) by Finance Act 2012 (c. 14), s. 34(6)

C16 S. 3(3) excluded (for the tax year 2014-15) by Finance Act 2014 (c. 26), s. 8(2)

C17 S. 3(3) excluded (for the tax year 2015-16) by Finance Act 2014 (c. 26), s. 9(2)