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Taxation (UK) · The computation of capital gains tax

Chargeable Persons, Assets and Disposals for Capital Gains Tax

Updated 11 October 2026 · Fact-checked

Capital gains tax applies to chargeable persons (individuals, trustees and personal representatives) who make a chargeable disposal of a chargeable asset. Most assets are chargeable. Cars, chattels sold for £6,000 or less, gilts, NS&I products and ISA investments are exempt. A disposal is usually taken to happen when contracts are exchanged.

Understand Chargeable Persons, Assets and Disposals

Capital gains tax (CGT) is a tax on the profit you make when you dispose of a capital asset. For a gain to be taxed, three things must all be true: a chargeable person makes a disposal, the disposal is chargeable, and the asset is a chargeable asset. If any one is missing, there is no CGT.

Chargeable persons for CGT are individuals, partners in a partnership (taxed as individuals), trustees and personal representatives of a deceased person. Companies are not chargeable persons for CGT. They pay corporation tax on their chargeable gains instead. Whether an individual is liable depends on UK residence; a UK resident is taxed on gains from assets anywhere in the world.

A disposal is wider than a sale. It includes selling, gifting, exchanging, and loss or destruction of an asset. Part of an asset can also be disposed of. A gift is treated as a sale at market value, because there are no sale proceeds to use. Death is not a disposal: the estate takes the asset at its market value at death, and the death itself produces no gain or loss.

Chargeable assets are all forms of property, including land, buildings, shares, goodwill and intangible assets, unless specifically exempt. Common exempt assets are private cars, chattels (tangible movable property) with a life of 50 years or less (wasting chattels, such as a racehorse), chattels sold for £6,000 or less, gilt-edged securities, qualifying corporate bonds, NS&I products, investments held in an ISA, and decorations for valour if not purchased. Foreign currency for personal use is also exempt. Some disposals are exempt too, such as a gift to a charity, and transfers between spouses or civil partners living together, which are made at no gain and no loss.

The date of disposal fixes the tax year and the rates and annual exempt amount that apply. For a sale under a contract, it is the date the contract is made (exchange of contracts), not the date of completion. For a conditional contract, it is the date the condition is satisfied. For a gift, it is the date the gift is completed. The tax year runs from 6 April to 5 April.

Key rules to remember

Conditions for a CGT charge
Chargeable person + chargeable disposal + chargeable asset = CGT charge
All three must be present. Exempt asset, exempt disposal or a non-chargeable person means no CGT.
Chargeable persons
Individuals, trustees, personal representatives (partners taxed as individuals); companies pay corporation tax instead
Residence of the individual decides whether worldwide gains are taxable.
Date of disposal
Unconditional contract: date of contract. Conditional contract: date condition met. Gift: date gift is completed
Not the date of completion or payment. Decides the tax year.
Gift or non-arm's length disposal
Proceeds = market value at date of disposal
Also applies to disposals to connected persons.
Spouse or civil partner transfer
Transfer at no gain, no loss (cost plus any indexation not applicable to individuals)
Applies when living together in the tax year of transfer. The recipient takes over the original cost.
CGT rates and annual exempt amount
Rates 18% and 24%; annual exempt amount £3,000; BADR and investors' relief rate 14%
Figures from ACCA's tax rates and allowances for Finance Act 2025.

How to solve Chargeable Persons, Assets and Disposals questions

Use this sequence for any question that asks whether CGT arises on an event.

  1. 1Identify the person. Is it an individual, trustee or personal representative (CGT) or a company (corporation tax)?
  2. 2Check whether a disposal has occurred: sale, gift, exchange, loss or destruction, part disposal. Death is not a disposal.
  3. 3Check whether the asset is exempt: car, chattel of £6,000 or less, wasting chattel, gilt, QCB, ISA, NS&I.
  4. 4Check whether the disposal is exempt or no gain no loss, such as a spouse transfer or gift to charity.
  5. 5Fix the date of disposal using the contract rules, then the tax year.
  6. 6If the gift or connected-party rule applies, use market value as the proceeds.
  7. 7State the conclusion clearly: chargeable or not, in which tax year, and why.

Quickest way: Four-question screen

When to use it: For objective test questions asking whether a gain is chargeable or in which year it falls.

  1. Ask: who? Company means not CGT.
  2. Ask: what asset? Spot exempt items first (car, gilt, ISA, chattel up to £6,000).
  3. Ask: what event? Sale or gift is a disposal; death is not.
  4. Ask: when? Use the contract date and check whether it falls before or after 5 April.

Common mistakes in Chargeable Persons, Assets and Disposals

  • Treating completion date as the disposal date.

    Students think the disposal happens when money changes hands.

    Fix: For a contract, use the date the contract is made. Completion only matters if there is no earlier contract.

  • Charging CGT on a company's gain.

    The word 'capital gains' is linked to tax generally.

    Fix: Companies are not chargeable persons for CGT. Their gains are chargeable to corporation tax.

  • Treating a gift as having no gain because no money was received.

    Students look for sale proceeds.

    Fix: A gift is a disposal at market value, unless it is to a spouse or civil partner or to a charity, which are no gain no loss or exempt.

  • Treating death as a disposal.

    Students link death with inheritance tax and assume CGT too.

    Fix: There is no CGT on death. Beneficiaries acquire at market value at death.

  • Treating all chattels as exempt.

    The £6,000 limit is half remembered.

    Fix: A chattel is exempt if sold for £6,000 or less, or if it is a wasting chattel. Above £6,000 it is chargeable, with special rules for the gain.

  • Treating cars as chargeable when they are vintage or valuable.

    Students confuse cars with chattels.

    Fix: Private motor cars are exempt assets whatever their value.

Worked examples

Example 1

Anna signed a contract on 28 March 2026 to sell a plot of land to Ben for £80,000. The contract completed on 10 May 2026. In which tax year is the disposal, and what is the date of disposal?

Show the solution
  1. The sale is an unconditional contract, so the disposal date is the date of the contract: 28 March 2026.
  2. The tax year runs 6 April to 5 April. 28 March 2026 falls in the tax year ending 5 April 2026.
  3. The completion date of 10 May 2026 is not relevant.

Answer: The disposal date is 28 March 2026, in the tax year ending 5 April 2026 (2025/26).

Example 2

During the year, Carla (an individual, UK resident) disposed of: (1) a private car for a gain of £4,000; (2) shares in a UK company for a gain of £9,000; (3) a painting sold for £5,500 that cost £1,000; (4) a gift of a holiday cottage to her husband, with whom she lives. Which items give rise to a chargeable gain for CGT?

Show the solution
  1. Car: a private car is an exempt asset, so no CGT.
  2. Shares: a chargeable asset and sold, so the gain of £9,000 is chargeable.
  3. Painting: a chattel sold for £5,500, which is £6,000 or less, so it is exempt.
  4. Cottage: a gift to a spouse living together is a no gain, no loss transfer, so no gain arises for Carla.

Answer: Only the share disposal creates a chargeable gain, of £9,000, before the annual exempt amount of £3,000 and any losses.

Exam tips

  • In objective tests, work through who, what, event and when before looking at the options.
  • Memorise the exempt list: cars, chattels of £6,000 or less, wasting chattels, gilts, QCBs, ISAs and NS&I.
  • Always state the date of disposal and tax year in a written answer, and write out the reason for each exemption.
  • Watch for a company in the scenario; the answer may be corporation tax rather than CGT.
  • Use market value for gifts, but remember spouse transfers are at no gain, no loss.

Practice questions from The computation of capital gains tax

Chargeable Persons, Assets and Disposals in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Chargeable Persons, Assets and Disposals: frequently asked questions

What is a disposal for capital gains tax?

A disposal includes selling, gifting, exchanging, and the loss or destruction of an asset, as well as disposing of part of an asset. A gift is treated as a sale at market value. Death is not a disposal.

What is the difference between chargeable and exempt assets?

Chargeable assets are all forms of property, such as land, shares and goodwill, unless exempted. Exempt assets, such as private cars, gilts, QCBs, ISA investments and chattels sold for £6,000 or less, produce no gain and no allowable loss.

Who pays capital gains tax in the UK?

Individuals, trustees and personal representatives pay CGT. Partners are taxed as individuals on their share. Companies pay corporation tax on their chargeable gains instead.

Which date counts as the date of disposal?

Under an unconditional contract it is the date of the contract, not completion. For a conditional contract it is the date the condition is met. For a gift it is the date the gift is completed.