Assets not liable to capital gains tax (CGT) generally include a primary residence (up to $250k/$500k gain), assets held in retirement accounts (401(k), IRAs, ISAs), personal-use items like cars, and gifted assets to charity. Additionally, inventory, patents, and certain collectibles may be exempt or taxed differently.
As already mentioned, some assets are specifically exempt from CGT. Some of the most common examples are: private motor cars, including vintage cars. gifts to UK registered charities.
You don't pay CGT on gains from:
The exemption under section 54 is allowed only if the capital gain arises from the transfer of a long-term capital asset being a residential house property or land appurtenant thereto whose income is taxable under the head of 'income from house property'.
In simple terms, this capital gains tax exclusion enables homeowners who meet specific requirements to exclude up to $250,000 (or up to $500,000 for married couples filing jointly) of capital gains from the sale of their primary residence.
A common way to defer or reduce your capital gains taxes is to use tax-advantaged accounts. Retirement accounts such as 401(k) plans, and individual retirement accounts offer tax-deferred investment. You don't pay income or capital gains taxes on assets while they remain in the account.
BIR Revenue Regulations No. 13-99 exempts citizens and resident aliens from capital gains tax on the sale of their principal residence, provided they fully utilize the proceeds to acquire or construct a new principal residence within 18 months and meet specific documentation requirements.
Strategies to Save Capital Gains Tax on Property Sales
These exemptions cover items like household goods, clothing, furnishings and appliances. Federal exemptions offer some protection for bankruptcy filers, including up to $800 per personal item, with a $16,850 aggregate value in total. State exemptions vary, though.
How Wealthy Households Use a “Buy, Borrow, Die” Strategy to Avoid Taxes on Their Growing Fortunes
The simple answer to this question is “yes.” There are two main types: (1) municipal bonds and municipal bond mutual funds and (2) tax-free money market funds. Municipal bonds are issued by state and local governments in order to finance capital expenditures; typically, municipal bond funds invest in municipal bonds.
One of the simplest yet most expensive mistakes is misunderstanding the difference between short-term and long-term capital gains taxes. Short-term gains — profits from assets held less than a year — are subject to typical income tax rates, which can reach 37% for high earners.
Notably, items held for sale in the ordinary course of business and real estate or depreciable property used in a business do not qualify as capital assets. Generally, personal belongings, investment properties, and items used for pleasure are considered capital assets.
The main exemptions from CGT include: Your home (Principal Private Residence Relief) Assets you get from your spouse.
The amount of tax-free capital gain depends on the asset, but the most common exemption is for your primary home, allowing single filers to exclude up to $250,000 (or $500,000 for married couples) of profit if you've lived there 2 of the last 5 years. Additionally, certain long-term investments in qualified small businesses or Opportunity Funds, plus gains on inherited assets (due to stepped-up basis at death), can also be tax-free, while lower income levels may qualify for a 0% long-term capital gains tax rate.
The "6-year rule" for Capital Gains Tax (CGT) in Australia allows you to treat a former main residence as tax-exempt for up to six years after you move out, even if you rent it out, enabling you to avoid CGT on any growth during that period. You qualify by moving out, choosing to treat it as your main home for tax, and can reset the rule by moving back in. If you rent it out for longer than six years, only the portion of the gain after the six-year mark becomes taxable.
The exclusion rule generally allows a taxpayer to exclude from gross income gain realized from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, the property has been owned and used by the taxpayer as their principal residence for a period totaling two or more ...
Want to make your assets virtually untouchable by creditors and lawsuits? Equity stripping may be the answer. This advanced technique involves encumbering your assets with liens or mortgages held by friendly creditors, such as an LLC or trust you control.
90% of the assets need to be used in business operations at the time of the sale. These figures should not be difficult to reach for an actively operating business, but it could be necessary to move some assets to a holding company or sell them prior to selling the shares.
Some items are exempt from CGT, including:
Maximum marginal rate is the highest rate of tax at any income level. This means for those with incomes between Rs 2 crore and Rs 5 crore, 39% will be the highest applicable tax rate, and for those with incomes above Rs 5 crore, it will be 42.74% — the highest tax rate since 1992.
To qualify for 0% capital gains tax, you must have long-term capital gains (assets held over a year) and your taxable income (after deductions) must fall below specific IRS thresholds, which change annually but are roughly <$48,350 for single filers and <$96,700 for married filing jointly for the 2025 tax year, allowing for higher total income when combined with deductions like the standard deduction. The key is keeping your adjusted gross income (AGI) low enough so that after subtracting deductions, your taxable income remains within these limits.
You do not usually need to pay tax on gifts to your husband, wife, civil partner or a charity. You do not pay Capital Gains Tax on: your car - unless you've used it for business. anything with a limited lifespan, like clocks - unless used for business.
Lifetime capital gains exemption eligibility