Annual exempt amount

The annual exempt amount is the Capital Gains Tax allowance: the amount of gains you can make each tax year before Capital Gains Tax is due. According to GOV.UK, it is £3,000 for individuals and £1,500 for trusts.

How it works:

• You add up all your gains in the tax year (6 April to 5 April), take off allowable losses, and then take off the £3,000.
• Married couples and civil partners who live together each have their own £3,000, and can give assets to each other with no tax, so both allowances can be used.

Example: a £19,500 gain on shares leaves £16,500 taxable after the allowance. For a basic rate taxpayer that £3,000 saves between £540 (at 18%) and £720 (at 24%). Splitting a sale across two tax years, before and after 5 April, uses two allowances.

See what your allowance saves with the Capital Gains Tax calculator.