01793818400 admin@ams-accountancy.co.uk

Breakdown of annual exempt amounts for Capital Gains

16th November 2018

There is an order for deciding how to set off the Annual Exempt Amount (for Capital Gains) and Capital Losses against Capital Gains

  • The Annual Exempt Amount (2018/19 £11,700) is set against any Capital Gains in the year BEFORE any Capital Losses are brought forward.  It is set against Capital Gains at the highest tax rate;
  • Then any Capital Losses in the year of the Gain are set against any remaining capital Gain.  Again, these are set against Capital Gains at the highest tax rate;
  • Then any unused Capital Losses from earlier years MUST be used and set against any remaining capital Gain.  Again, these are set against Capital Gains at the highest tax rate.

These rules ensure that the Annual Exempt Allowance is not wasted by claiming Losses. 

They also ensure that Losses are set against those Gains taxed at 28% first, then 20%, then 18%, then 10%.

And finally, they ensure that Losses are used as soon as possible.