Capital Gains Tax

Every individual has an annual exempt amount of £3,000, taxed at 0% — the first slice of gains in a tax year is free. Above that, the rate depends on how much of the basic-rate band the client's other taxable income has already used up: gains that fit in whatever basic-rate room is left are taxed at 18%, and anything above that at 24%. Losses have their own ordering rules that trip people up: current-year losses must be set against current-year gains first, with no choice about it — you can't preserve the annual exempt amount by declining to use a current-year loss. Brought-forward losses from earlier years work differently: they're only used *after* the annual exempt amount has already sheltered what it can, so they don't get wasted covering a gain that was going to be tax-free anyway.