Section 5 Exemption for first £3,000 of gainsC5P1C1
United Kingdom
An individual shall not be chargeable to capital gains tax in respect of so much of his taxable amount for any year of assessment as does not exceed F2the exempt amount for the year.
Subject to subsection (1B) below, the exempt amount for any year of assessment shall be £5,000.
If the retail prices index for the month of December preceding the year 1983-84 or any subsequent year of assessment is higher than it was for the previous December, then, unless Parliament otherwise determines, subsection (1A) above shall have effect for that year as if for the amount specified in that subsection as it applied for the previous year (whether by virtue of this subsection or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index and, if the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple.
The Treasury shall, before the year 1983–84 and each subsequent year, make an order specifying the amount which by virtue of this section is the exempt amount for that year ; and any such order shall be made by statutory instrument.
For the purposes of this section an individual’s taxable amount for a year of assessment is the amount on which he is chargeable under section 4(1) above for that year but—
where the amount of chargeable gains less allowable losses accruing to an individual in any year of assessment does not exceed the exempt amount for the year, no deduction from that amount shall be made for that year in respect of allowable losses carried forward from a previous year or carried back from a subsequent year in which the individual dies, and
where the amount of chargeable gains less allowable losses accruing to an individual in any year of assessment exceeds the exempt amount for the year, the deduction from that amount for that year in respect of allowable losses carried forward from a previous year or carried back from a subsequent year in which the individual dies shall not be greater than the excess.
Where in a year of assessment—
the amount of chargeable gains accruing to an individual does not exceed F4the exempt amount for the year, and
the aggregate amount or value of the consideration for all the disposals of assets made by him (other than disposals gains accruing on which are not chargeable gains) does not exceed F5an amount equal to twice the exempt amount for the year;
a statement to the effect of paragraphs (a) and (b) above shall, unless the inspector otherwise requires, be sufficient compliance with any notice under section 8 of the M1Taxes Management Act 1970 requiring the individual to make a return of the chargeable gains accruing to him in that year.
Schedule 1 to this Act shall have effect as respects the application of this section to F6husbands and wives, personal representatives and trustees.
Annotations
Textual amendments
- F1
S. 5(1) substituted for s. 5(1)–(3) by Finance Act 1980 (c. 48, SIF 63:1), s. 77(2) for 1980–81 et seq.
- F2
Words substituted by Finance Act 1982 (c. 39, SIF 63:2), s. 80(1)(a) for 1982–83 et seq.
- F3
S. 5(1A)–(1C) inserted by Finance Act 1982 (c. 39, SIF 63:2), s. 80(2) for 1982–83 et seq.
- F4
Words substituted by Finance Act 1982 (c. 39, SIF 63:2), s. 80(1)(a) for 1982–83 et seq.
- F5
Words substituted by Finance Act 1982 (c. 39, SIF 63:2), s. 80(1)(b) for 1982–83 et seq.
- F6
Words repealed by Finance Act 1988 (c. 39, SIF 63:1, 2), s. 148 and Sch. 14 Pt. VIII from 1990–91
Marginal citations
- M1
Modifications
- C1
S. 5 excluded by Finance Act 1991 (c. 31, SIF 63:2), s. 89(1), Sch. 16, para. 3(1)(a).
- C2
£5,000 for 1988–89 and 1989–90
- C3
S. 5(1B) does not apply for 1988–89 and 1989–90
- C4
S. 5(1B) excluded (1990–91) by Finance Act 1990 (c.29, SIF 63:2), s. 72
- C5
S. 5 amended (1990–91) by Finance Act 1990 (c. 29, SIF 63:2), s. 72
Subordinate legislation made
- P1
S. 5: for previous exercises of this power see Index to Government Orders.
- P2
S. 5(1C) power exercised by S.I. 1991/736.
Notes on the whole Act
Textual amendments
- F1
Act repealed (6.3.1992 with effect as mentioned in s. 289(1)(2) of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch.12 (with s. 201(3), Sch. 11 paras. 20, 22, 26(2), 27 and with saving in Sch. 11 para. 24(2)) and subject to an amendment (prosp.) by Museum and Galleries Act 1992 (c. 44), s. 11(2), Sch. 8 Pt. I para. 1(1)(2)(7), and amendments by: Disability Living Allowance and Disability Working Allowance Act 1991 (c. 21), s. 4(2), Sch. 2 para. 9(1)(2) (in force 6.4.1992 by S.I. 1991/2617, art. 2(f)); S.I. 1991/2874, art. 2 (in force 6.4.1992 by S.R. 1992/94, art. 2); Social Security (Consequential Provisions) Act 1992 (c. 6), s. 4, Sch. 2 para. 52(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Social Security (Consequential Provisions) (Northern Ireland) Act 1992 (c. 9), s. 4, Sch. 2 para. 20(a)(b) (in force 1.7.1992 by s. 7(2) of the amending Act); Finance (No. 2) Act 1992 (c. 48), ss. 35(2), 47, 48, 56, 77, Sch. 9 para. 20(1)(inserting ss. 143A and 143B), Sch. 17 paras. 3, 6(2)(5), 7, (the amendments coming into force 16.7.1992 except for the amendment by s. 56, Sch. 9 para. 20(1) which comes into force on 19.2.1993 by S.I. 1993/236, art. 2); and amendments (retrospective to 1.1.1992) by ss. 35(2), 47, 48 of the same 1992 Act, and amendments (27.7.1993 with effect as mentioned in ss. 84(3), 86(4), 88(4), 105(4) of the amending Act) by 1993 c. 34, ss. 84(3), 86(4), 88(4)(a)(b), 105(3)(4)