How Much Is Capital Gains Tax On Cryptocurrency

Capital Gains Tax in the UK

Introduction

When you sell certain assets, you may be liable to pay Capital Gains Tax (CGT). CGT is a tax on the profit you make from selling an asset that has increased in value. The tax-free allowance for CGT is £12,300 for the 2023-2024 tax year. This means that you do not have to pay CGT on the first £12,300 of profit you make from selling assets.

Assets Subject to CGT

CGT applies to the following types of assets: * Property * Shares * Bonds * Unit trusts * Other investments

Calculating Your CGT Liability

To calculate your CGT liability, you need to subtract the cost of acquiring the asset from the sale price. The difference between these two amounts is your capital gain. You then need to multiply the capital gain by the CGT rate. The CGT rate depends on your income tax band. For most people, the CGT rate is 10%. However, if you are a higher rate taxpayer, the CGT rate is 20%.

Paying CGT

You need to report your CGT liability on your self-assessment tax return. You can do this online or by post. The deadline for submitting your self-assessment tax return is 31st January following the end of the tax year.

Other Taxes on Assets

In addition to CGT, you may also need to pay other taxes on assets, such as: * Stamp Duty Land Tax (SDLT) * Inheritance Tax (IHT) * Value Added Tax (VAT) It is important to be aware of these taxes so that you can plan your finances accordingly.