1. Assets and investments liable to CGT

If you own assets such as shares, property or a business, you can be liable to CGT when you sell them or give them away if they have increased in value since you acquired them.

2. What is not liable?

Some assets are free of CGT. The main ones are: your principal residence, private motor cars, personal possessions disposed of for less than £6,000 or with a useful life of 50 years or less, investments held in Peps, Isas, Tessas, National Savings & Investments products; British government stock and most corporate bonds.

Also exempt are shares held in a venture capital trust or enterprise investment scheme, proceeds of pension plans and life insurance policies, unless purchased second-hand.

3. Gifts to your spouse

Gifts between husband and wife are not liable to CGT provided that you are living together at the time or it is within the year of separation. But tax will be payable when your spouse sells or gives away the asset. The gain will then be calculated as if your spouse had owned the asset from the time you acquired it. So transferring assets to a spouse who is a lower-rate taxpayer can reduce the eventual bill.

4. When you die

There will be no CGT to pay on any assets that you leave when you die, but there may be an inheritance tax liability if the assets exceed the nil-rate band (currently £263,000).

5. The annual allowance

You will not have to pay tax if your total capital gains in a tax year are less than your annual CGT allowance (£8,200 for the current tax year). So married couples together can receive up to £16,400 of gains tax-free. Transferring assets between spouses before a disposal can ensure that husband and wife fully use their exemptions.

Children have an annual allowance of £8,200 on their investments, which may be held in a “bare trust” on their behalf. But when parents make gifts of assets to children, other than cash, this will be considered a disposal.