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Taxation (UK) · The scope of the taxation of capital gains

Chargeable Persons and Residence for Capital Gains Tax

Updated 11 October 2026 · Fact-checked

Capital gains tax is charged on individuals, personal representatives and trustees who are UK resident when they dispose of chargeable assets. UK residents pay on worldwide gains. Companies pay corporation tax instead. To solve a question, identify the person, test residence using the statutory residence test, then apply the right annual exempt amount and rate.

Understand Chargeable Persons and Residence for Capital Gains Tax

Capital gains tax (CGT) is a tax on the gain you make when you dispose of a chargeable asset. Before you compute any gain, you must ask a first question: is this person within the charge at all?

Chargeable persons for CGT are individuals, personal representatives (PRs) of a deceased person, and trustees. A partnership is not taxed itself. Each partner is taxed on their own share of the gain. Companies do not pay CGT. They pay corporation tax on their chargeable gains.

The second question is residence. An individual who is UK resident in a tax year is chargeable on gains from disposals of assets anywhere in the world. A person who is not UK resident is generally not chargeable on gains, even on UK assets. There are exceptions, such as gains on UK land and property, which you should recognise but which are not the focus of this topic.

Residence is decided by the statutory residence test. The test looks at how many days you spend in the UK, whether you were resident in the UK in earlier years, and how many UK ties you have. Spending 183 days or more makes you automatically resident. Spending fewer than 16 days makes you automatically not resident. Between those limits, the number of ties decides.

Death is not a disposal. No gain arises on death, and the PRs acquire the assets at their market value at the date of death. After death, PRs are chargeable on gains they make when they sell estate assets. Trustees are chargeable on disposals of trust assets. Both pay CGT at the higher rate of 24%. PRs get the full annual exempt amount in the tax year of death and the next two tax years. Trustees normally get half the individual amount.

Key rules to remember

Chargeable persons
CGT: individuals + personal representatives + trustees. Companies: corporation tax on chargeable gains
Partners are taxed individually on their share of a partnership gain.
Scope for UK residents
UK resident = worldwide gains chargeable
Not resident: generally no CGT, subject to exceptions such as UK land.
Statutory residence test: days
Under 16 days: automatically not resident. 183 days or more: automatically resident
Between these limits you must count UK ties.
Previously resident, ties needed
16–45 days: 4 ties. 46–90: 3 ties. 91–120: 2 ties. 121–182: 1 tie
Resident if you have that number of ties or more.
Not previously resident, ties needed
16–45 days: automatically not resident. 46–90: 4 ties. 91–120: 3 ties. 121–182: 2 ties
Resident if you have that number of ties or more.
CGT rates and annual exempt amount
Lower rate 18%. Higher rate 24%. Annual exempt amount £3,000
Trustees and PRs pay 24%. Trustees normally get half the annual exempt amount.
PRs' annual exempt amount
Full amount in the tax year of death and the next two tax years
The deceased gets the full amount up to the date of death.

How to solve Chargeable Persons and Residence for Capital Gains Tax questions

Use this order for any question on who is chargeable and whether residence matters.

  1. 1Identify the person making the disposal: individual, company, PRs, trustees or partners.
  2. 2If it is a company, stop. The gain is taxed under corporation tax, not CGT.
  3. 3If it is an individual, decide residence. Count UK days, check whether they were previously UK resident, and count UK ties.
  4. 4Apply the table: under 16 days or 183 or more settle it. Otherwise compare ties with the number needed.
  5. 5If resident, include gains on all assets worldwide. If not resident, exclude them unless an exception such as UK land applies.
  6. 6For a deceased person, treat death as no disposal. Later sales by PRs are chargeable, and the base cost is the value at death.
  7. 7Apply the correct annual exempt amount (£3,000, or half for trustees) and the correct rate (18% or 24% for individuals, 24% for PRs and trustees).
  8. 8State your conclusion clearly in one sentence.

Quickest way: Three-question check

When to use it: Use this for objective test questions where you have about three minutes.

  1. Who is it? Company means corporation tax. Individual, PRs or trustees means CGT.
  2. If an individual, where do days fall? Under 16 or 183 or more decides at once.
  3. If between those limits, read whether they were previously resident, then compare ties with the figure in the table. Remember the 'or more' wording.

Common mistakes in Chargeable Persons and Residence for Capital Gains Tax

  • Charging CGT on a company's gain

    Students see the word 'gain' and assume CGT applies to every taxpayer.

    Fix: Companies pay corporation tax on chargeable gains. CGT is only for individuals, PRs and trustees.

  • Treating death as a disposal

    Students confuse CGT with inheritance tax.

    Fix: No CGT arises on death. The PRs acquire the assets at market value at the date of death.

  • Using the wrong tie column

    The previously resident and not previously resident columns look alike.

    Fix: Decide first whether the person was resident in the UK in earlier years. Then pick the matching column.

  • Applying the tie test to someone under 16 days or at 183 days or more

    Students always count ties by habit.

    Fix: Under 16 days is automatically not resident. 183 days or more is automatically resident. Ties do not matter.

  • Using the lower rate for trustees or PRs

    Students apply the individual rules to every chargeable person.

    Fix: Trustees and PRs pay at the higher rate of 24%.

  • Giving trustees the full annual exempt amount

    Students remember £3,000 and use it for everyone.

    Fix: Trustees normally get half the individual amount. PRs get the full amount for the year of death and the next two tax years.

Worked examples

Example 1

Mia was UK resident in earlier years. In the current tax year she spent 70 days in the UK and has 3 UK ties. She sold overseas shares for a chargeable gain of £20,000. She is a higher rate taxpayer. Compute her CGT.

Show the solution
  1. She was previously resident and spent 70 days in the UK. That falls in the 46 to 90 days band.
  2. In that band a previously resident person is resident with 3 ties or more. She has 3 ties, so she is UK resident.
  3. A UK resident is chargeable on worldwide gains, so the overseas shares are within CGT.
  4. Gain £20,000 less annual exempt amount £3,000 = taxable gain £17,000.
  5. As a higher rate taxpayer, tax = £17,000 × 24% = £4,080.

Answer: Mia is UK resident and her CGT is £4,080.

Example 2

Ahmed died owning shares with a market value of £80,000 at the date of death. His PRs sold them in the following tax year for £95,000. The PRs have no other disposals. Compute the CGT payable by the PRs.

Show the solution
  1. Death is not a disposal, so no gain arises on Ahmed's death.
  2. The PRs acquire the shares at £80,000, the value at the date of death.
  3. Gain on the sale = £95,000 − £80,000 = £15,000.
  4. The sale falls within the tax year of death or one of the next two tax years, so the PRs get the full annual exempt amount of £3,000.
  5. Taxable gain = £15,000 − £3,000 = £12,000.
  6. PRs pay CGT at the higher rate of 24%: £12,000 × 24% = £2,880.

Answer: The PRs pay CGT of £2,880.

Exam tips

  • In objective tests, read the person first. Many wrong answers come from using CGT for a company.
  • Memorise the residence table by column. Practise reading it with both previously resident and not previously resident cases.
  • In constructed-response questions, state residence in one line before computing. Markers reward a clear conclusion.
  • For an estate, show the market value at death as the base cost and say that death is not a disposal.
  • Always state the rate you use and why: 18% or 24% for individuals, 24% for PRs and trustees.

Practice questions from The scope of the taxation of capital gains

Chargeable Persons and Residence for Capital Gains Tax 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 and Residence for Capital Gains Tax: frequently asked questions

Who is liable to capital gains tax in the UK?

Individuals, personal representatives of a deceased person and trustees are liable to CGT on chargeable gains. Companies are not. They pay corporation tax on their chargeable gains. Each partner is taxed on their own share of a partnership gain.

Do non-UK residents pay capital gains tax?

Generally not. A person who is not UK resident is usually outside CGT. There are exceptions, such as gains on UK land, but a UK resident is taxed on worldwide gains.

How many days make someone UK resident for CGT?

Spending 183 days or more in the UK makes you automatically resident. Spending fewer than 16 days makes you automatically not resident. Between those limits, the days and the number of UK ties decide, using the table you are given.

Is there CGT when someone dies?

No. Death is not a disposal for CGT. The personal representatives take the assets at market value at the date of death, and later sales by them can give rise to a gain.

What CGT rate do trustees and personal representatives pay?

They pay CGT at the higher rate of 24%. Individuals pay 18% or 24%, depending on their taxable income.