Annual exempt amount (UK capital gains tax)
The annual exempt amount reduces chargeable gains in the individual’s capital gains tax calculation after applicable current-year losses. Unused brought-forward losses are used subject to their rules, including protecting the annual exempt amount where appropriate. For UK tax year 2025–26 the annual exempt amount for individuals was £3,000. The amount, allocation between gains and availability depend on the taxpayer and relevant year.
Worked example
For 2025–26, an individual has net chargeable gains of £8,000 after current-year losses and no brought-forward losses. Assuming the full £3,000 annual exempt amount is available, £5,000 remains before applying relevant rates or reliefs.
Common mistake
Using an allowance from an earlier year or using brought-forward losses without considering whether the annual exempt amount would otherwise be wasted.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |