Capital Gains Tax Allowance 2020/21: Rates, Reporting, and Losses

The Capital Gains Tax allowance for 2020/21 was £12,300 per individual, meaning you could realize up to that amount in gains from selling assets between 6 April 2020 and 5 April 2021 without paying any Capital Gains Tax.¹ The allowance applied to your total gains for the whole tax year, and anything above it was taxed at rates set by the asset type and your income band.

The Annual Exempt Amount by Taxpayer Type

The £12,300 figure covered individuals, personal representatives of deceased estates, and trustees of trusts for disabled people. Most other trustees received half that, at £6,150.¹

Personal representatives administering an estate got the full £12,300 for the tax year of death and the two tax years after. Once that window closed, the estate received no further allowance.¹

Trustees on the £6,150 rate could see it reduced if the settlor had created multiple trusts since 6 June 1978.²

The allowance was available to anyone UK-resident during 2020-21. Non-residents were only exposed to CGT on UK residential property or land disposals, not on other asset types.³

How the Allowance Worked in Practice

Use it or lose it. If your gains in 2020-21 did not use the full £12,300, the unused portion did not carry forward. You could not bank it for a future year, so timing disposals across tax years was a legitimate way to make the allowance stretch further if you held several assets sitting on gains.

Joint ownership doubled things up. Each co-owner claimed their own £12,300 against their share of the profit, so a couple selling a jointly held buy-to-let had £24,600 of tax-free gain between them before either owed anything.

The Rates Above the Allowance

Once gains crossed £12,300, the rate depended on what you sold and where the gain landed in your income tax band. For shares, funds, and most business assets, basic-rate taxpayers paid 10 per cent and higher- or additional-rate taxpayers paid 20 per cent.¹

Residential property gains were charged more heavily. Basic-rate taxpayers paid 18 per cent and higher-rate taxpayers 28 per cent on the sale of homes that were not their main residence.¹ Trustees and personal representatives disposing of residential property also paid 28 per cent.

The rate split was not always clean. HMRC added your taxable gains on top of your income for the year, and any portion that pushed above the basic-rate threshold was taxed at the higher CGT rate. Someone earning near the top of the basic band could pay both rates on different slices of the same gain.

Business Asset Disposal Relief, renamed from Entrepreneurs’ Relief at the start of 2020-21, charged a flat 10 per cent on qualifying business sales, with a lifetime limit that had been cut from £10 million to £1 million on 11 March 2020.⁴

What the Allowance Applied To

CGT bit on a defined range of disposals during 2020-21:

Residential property that was not your main home: buy-to-lets, second homes, holiday lets, inherited property.
Shares, bonds, and fund units held outside ISAs, PEPs, or pensions.
Business assets, including land, buildings, machinery, and goodwill.
Personal possessions sold for more than £6,000, such as antiques, jewellery, and art.⁵
Cryptocurrency, which HMRC treated as property, so selling or swapping tokens could trigger a gain.

Several categories sat outside CGT entirely. Gains inside an ISA or PEP were exempt, as were UK government gilts and Premium Bonds. Private cars, betting and lottery winnings, and personal possessions sold for £6,000 or less were also excluded.⁶ For most people the biggest exclusion was their main home, covered automatically by Private Residence Relief where the property had been their only or main residence throughout ownership.

Calculating the Gain and Using Losses

The gain is not simply sale price minus purchase price. You can deduct solicitors’ fees, estate agent commissions, surveyor costs, stamp duty on the original purchase, and advertising costs. Permanent improvements that added value also count, though routine maintenance and repairs do not.⁷

Once you have a net gain figure for each disposal, add them together for the year and subtract the £12,300 allowance. Only the remainder is taxable.

Losses adjust the picture. Losses in the same tax year must be set against gains before the allowance is applied, so they can wipe out the tax charge but cannot preserve the allowance. Losses left over after that carry forward indefinitely. Carried-forward losses, though, are used only to the extent needed to bring the year’s net gains down to the annual exempt amount, keeping the rest in reserve. Losses must be reported to HMRC within four years of the end of the tax year in which they arose, otherwise they can no longer be used.

Reporting and Paying What You Owe

The 2020-21 year brought a big change for property. From 6 April 2020, if you sold UK residential property and the gain was not fully covered by Private Residence Relief, you had to report it and pay the tax on account within 30 days of completion, using HMRC’s online Capital Gains Tax on UK property account.⁸ Late reporting attracted penalties and interest. Non-residents disposing of UK property used the same 30-day service.³

For everything else, including shares, business disposals, and personal possessions, reporting went through Self Assessment. The deadline for 2020-21 gains was 31 January 2022. If you did not usually file a return but had gains above the allowance, you had to register for Self Assessment.

How the 2020/21 Allowance Compares to Later Years

The £12,300 allowance held through 2022-23, then fell sharply. It dropped to £6,000 for individuals in 2023-24 and to £3,000 from 2024-25. The trustee allowance followed the same pattern, ending at £1,500.¹ The 2020-21 figure was four times the current one.

Rates have shifted too. From 30 October 2024, the lower residential property rate rose from 18 per cent to 24 per cent, and the higher rate moved from 28 per cent to 24 per cent, collapsing the two residential bands into one for higher earners. If you are filing a late return for a disposal that completed during 2020-21, the rates and allowances from that year still apply to the calculation, whatever date you file.

1
GOV.UK. Capital Gains Tax Rates and Allowances
2
GOV.UK. Trusts and Capital Gains Tax
3
GOV.UK. Tell HMRC About Capital Gains Tax on UK Property or Land if Youre Not a UK Resident
4
GOV.UK. Change to the Entrepreneurs Relief Lifetime Limit for Capital Gains Tax
5
HM Revenue & Customs. Personal Possessions and Capital Gains Tax 2024 HS293
6
GOV.UK. Capital Gains Tax – What You Pay It On, Rates and Allowances
7
GOV.UK. Capital Gains Manual – CG15250
8
GOV.UK. Report and Pay Your Capital Gains Tax – If You Sold a Property in the UK on or After 6 April 2020