The Annual Exemption

The first part of your total capital gains for a tax year is tax free. For the tax year 2010/11 it is £10,100. For 2011/12  and 2012/13 it is £10,600.

Example:                                                                                    £
Proceeds of shares sold on 1 June 2012                           32,000
Cost of shares which have been sold                                20,000
_____
Total of Capital Gains for the tax year 20012/13                12,000

Less Annual Exemption                                                     (10,600)
Gain on which tax is due                                                    £1,400

The rate of tax for capital gains for gains is 18% for basic rate taxpayers and 28% for higher rate taxpayers. The gain is added to income to identify the correct rate of tax.  For a basic rate taxpayer, £252 of Capital Gains Tax would be due (£1,400 at 18%). For 2012/13, this would be due for payment by 31 January 2014.