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Version Superseded: 01/12/2009
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Taxation of Chargeable Gains Act 1992, Cross Heading: Capital gains tax is up to date with all changes known to be in force on or before 03 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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(1)Subject to any exceptions provided by this Act, and without prejudice to sections 10 and 276, a person shall be chargeable to capital gains tax in respect of chargeable gains accruing to him in a year of assessment during any part of which he is resident in the United Kingdom, or during which he is ordinarily resident in the United Kingdom.
(2)Capital gains tax shall be charged on the total amount of chargeable gains accruing to the person chargeable in the year of assessment, after deducting—
(a)any allowable losses accruing to that person in that year of assessment, and
(b)so far as they have not been allowed as a deduction from chargeable gains accruing in any previous year of assessment, any allowable losses accruing to that person in any previous year of assessment (not earlier than the year 1965-66).
(3)Except as provided by section 62, an allowable loss accruing in a year of assessment shall not be allowable as a deduction from chargeable gains accruing in any earlier year of assessment, and relief shall not be given under this Act more than once in respect of any loss or part of a loss, and shall not be given under this Act if and so far as relief has been or may be given in respect of it under the Income Tax Acts.
[F1(4)If chargeable gains are treated by virtue of section 87 or 89(2) as accruing to a person in a tax year (“the relevant deemed gains”)—
(a)subsection (2) has effect as if the relevant deemed gains had not accrued, and
(b)the amount on which the person is charged to capital gains tax for that year is the sum of—
(i)the amount given by subsection (2) as it has effect by virtue of paragraph (a), and
(ii)the amount of the relevant deemed gains.
(5)In subsection (4) the reference to section 87 or 89(2) is to that section read, where appropriate, with section 10A.]
[F2(7)Where in any year of assessment—
(a)there are amounts treated as accruing to a person by virtue of section F3... 86,
(b)two or more of those amounts, or elements of them—
(i)relate to different settlements, F4...
F4(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c)losses are deductible from the amounts or elements mentioned in paragraph (b) above F5... but are not enough to exhaust them all,
the deduction applicable to each of the F6... amounts shall be the appropriate proportion of the aggregate of those losses.
The “appropriate proportion” is that given by dividing the F6... amount in question by the total of the F6... amounts.
F7(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]
Textual Amendments
F1S. 2(4)(5) substituted for s. 2(4)-(6) (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 24(2)
F2S. 2(6)-(8) inserted (with effect in accordance with Sch. 11 paras. 7, 8 of the amending Act) by Finance Act 2002 (c. 23), Sch. 11 para. 2(4)
F3Words in s. 2(7)(a) omitted (with effect in accordance with Sch. 2 para. 22 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 2
F4S. 2(7)(b)(ii) and preceding word omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 24(3)(a)
F5Words in s. 2(7)(c) omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 24(3)(b)
F6Words in s. 2(7) omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 24(3)(c)
F7S. 2(8) omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 24(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F8S. 2A omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 25
(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.
[F9(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.]
(2)Subject to subsection (3) below, the exempt amount for any year of assessment shall be £5,500.
(3)If the retail prices index for the month of [F10September] preceding a year of assessment is higher than it was for the previous [F10September], then, unless Parliament otherwise determines, subsection (2) above shall have effect for that year as if for the amount specified in that subsection as it applied for the previous year (whether by virtue of this subsection or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index and, if the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.
(4)The Treasury shall, before each year of assessment, make an order specifying the amount which by virtue of this section is the exempt amount for that year.
[F11(5)For the purposes of this section an individual’s taxable amount for any year of assessment is the amount [F12which] 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;
[F13(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 [F14(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)[F15if section 2(4) applies for that year,], adding whichever is the smaller of the exempt amount for that year and the amount [F16mentioned in section 2(4)(b)(ii)].]
F17(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)For the year of assessment in which an individual dies and for the next 2 following years, [F18subsections (1) to (5C)] above shall apply to his personal representatives as they apply to an individual.
[F19(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
F9S. 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)
F10Words in s. 3(3) substituted (27.7.1993 with effect for the years 1994-95 and subsequent years as mentioned in s. 83(2)) by 1993 c. 34, s. 83(1)
F11S. 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
F12Word 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)
F13S. 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)
F14Words 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)
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)(a)
F16Words 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)
F17S. 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)
F18Words 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)
F19S. 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
C4S. 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
C5S. 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
C6S. 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
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
C8S. 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
C9S. 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
C10S. 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
C11S. 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
C12S. 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
C13S. 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
C14S. 3(3) excluded (for the year 1994-95) by Finance Act 1994 (c. 9), s. 90
(1)Where in the case of an individual—
(a)the amount of chargeable gains accruing to him in any year of assessment does not exceed the exempt amount for that year, and
(b)the aggregate amount or value of the consideration for all chargeable disposals of assets made by him in that year does not exceed four times the exempt amount for that year,
a statement to that effect is sufficient compliance with so much of any notice under section 8 of the Management Act as requires information for the purposes of establishing the amount in which he is chargeable to capital gains tax for that year.
(2)For the purposes of subsection (1)(a) above—
F21(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)the amount of chargeable gains accruing to an individual in a year of assessment for which [F22a deduction falls to be made in respect of allowable losses is the amount before the deduction].
(3)For the purposes of subsection (1)(b) above a “chargeable disposal” is any disposal other than—
(a)a disposal on which any gain accruing is not a chargeable gain, or
(b)a disposal the consideration for which is treated by virtue of section 58 [F23(spouses and civil partners)] as being such that neither a gain nor a loss would accrue.
(4)Subsection (1) above applies to personal representatives (for the year of assessment in which the individual in question dies and for the next 2 following years) as it applies to an individual.
(5)Subsection (1) above applies to the trustees of a settlement in accordance with Schedule 1.
[F24(5A)Subsection (1) does not apply to an individual for a tax year if—
(a)section 809B of ITA 2007 (claim for remittance basis to apply), or
(b)section 16ZB below (certain chargeable gains charged on remittance basis),
applies to the individual for that year.]
(6)In this section “exempt amount” has the meaning given by section 3 (read, where appropriate, with Schedule 1).]
Textual Amendments
F20S. 3A inserted (with application in accordance with Sch. 28 para. 7 of the amending Act) by Finance Act 2003 (c. 14), Sch. 28 para. 1
F21S. 3A(2)(a) omitted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 27(a)
F22Words in s. 3A(2)(b) substituted (with effect in accordance with Sch. 2 para. 56(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 27(b)
F23Words in s. 3A(3)(b) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 106
F24S. 3A(5A) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 57
The rate of capital gains tax is 18%.]
Textual Amendments
F25S. 4 substituted (with effect in accordance with s. 8(3) of the amending Act) by Finance Act 2008 (c. 9), s. 8(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F26S. 5 repealed (with effect in accordance with s. 120(2) of the amending Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. III(29)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F27S. 6 omitted (with effect in accordance with Sch. 2 para. 22 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F28S. 7 repealed (with effect in accordance with s. 103(7) of the amending Act) by Finance Act 1995 (c. 4), s. 115(12), Sch. 29 Pt. VIII(14)
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