Capital Gains Tax

You pay Capital Gains Tax when you 'dispose' of an asset, which means:

• selling it
• giving it away as a gift
• transferring it to someone else
• exchanging it for something else
• getting compensation for it - like an insurance payout if it's been destroyed

Assets which are exempt from Capital Gains Tax include your car, personal possessions under £6,000 in value and normally your main home.

You have an annual tax free allowance before you start paying capital Gains Tax, known as the "annual exempt amount". For the 2013-2014 tax year, the annual exempt amount is £10,900 for individuals and £5,300 for trustees.

You must keep records of any purchase or disposal of assets as well as any costs associated with the asset to support your tax return.

If your gain in a tax year is more than the annual exempt amount, you must report this to HMRC. If you haven't received a tax return, you will need to request one.

You can pay Capital Gains Tax through your Self-Assessment tax return.