Seven ‘lesser-known’ things that could trigger a Capital Gains Tax bill

bills have surged dramatically with £808million paid in the last three months of 2024 alone – a 60% increase from the previous year.

As CGT continues to rise, many may be unaware of the lesser-known situations that could trigger a whopping bill.

While CGT is commonly associated with stocks, shares and sales, it can apply to a range of other assets and transactions.

Sarah Coles, head of personal finance at , explained: “Capital gains tax is the Luke Hemsworth of tax threats. It’s far less well-known than its tax siblings and yet carries some serious muscle.

“It has been in the spotlight more since the slashing of the tax-free allowance and the upping of the rate on non-property assets, but there’s still the chance it has slipped under the radar.”

The tax-free allowance has dropped

Capital gains tax (CGT) is a tax levied on the profit people make when selling an asset. The “gain” is the amount that is taxed, not the amount of money a person receives.

The capital gains tax-free allowance – the amount of money people can make without paying tax – has been reduced significantly over the past few years.

In 2022/23, you could realise a gain of £12,300 without incurring CGT. By 2025/26, that allowance is set to be just £3,000, meaning more people are now liable to pay CGT, and some may face it for the first time.

The rate has risen

The recent Budget increased the rate of CGT on non-property assets, rising from 20% to 24% for higher-rate taxpayers and from 10% to 18% for basic-rate taxpayers.

Ms Coles said: “For couples who arrange for the bulk of taxable gains to be made by a lower earner, this was a particularly painful hike.”

You might pay it on things you give away

CGT isn’t just paid when you sell assets; you can also incur it when you give something away. Ms Coles said: “If you give [an asset] away to anyone other than a spouse or civil partner, the gain it has made since you bought it will normally be assessed for capital gains tax purposes.”

She added: “If you give away assets with gains of over £3,000, there will usually be tax to pay.”

However, if an asset is given to a spouse or civil partner, Ms Coles noted there would be no tax at the time of the transfer, but CGT will be due when the recipient sells it, based on the original purchase price.

If you sell something for less than it’s worth, you have to pay more than you think

Some people try to avoid CGT by selling items like second properties for less than their market value. However, CGT is calculated on the full market value, not the sale price.

So, even if you sell at a loss, the tax is due based on the asset’s value.

You may pay it on crypto – including if you spend it

Ms Coles said can be “easily overlooked” because it was initially conceived as a new way of spending money.

However, she pointed out: “Because speculation has meant the value can change so much, you could be spending assets which have gained significantly in value.

“As this is counted as disposing of them, it can trigger a tax bill. It means you need to be certain about when you acquired the assets and how much they have gained in value since then – and keep good records.”

You may pay it on things you exchange for something else

This includes two people exchanging second properties – it doesn’t get around the CGT bill. Ms Coles added: “It also includes someone swapping one type of crypto for another.”

You might pay it on things you sell on sites like eBay

If you’re not buying and selling to make a profit, you don’t need to worry about paying income tax on your profits. However, Ms Coles said: “If you sell something worth £6,000 or more and make a gain of more than £3,000, you may have to pay capital gains tax.

“This includes things like jewellery, paintings and antiques. It also includes sets of things that will be valued together if sold to the same person. However, it doesn’t usually include cars or things with a limited lifespan, like clocks.”