Is this per year since the investment was made, or per year when gains are realised?
Example:
I invested £10k ten years ago, it is now worth £100k. I want to cash out for a £90k profit.
Do I pay tax on (£90k - £12k =) £78k?
Or because I haven't touched this investment since I made it ten years ago do I get £12k x 10 years = £120k allowance and therefore pay no tax?
I suspect it's the first oneif so, how does the gain get calculated over multiple years? For instance if I cashed out £22k this tax year I wouldn't pay any tax (£10k capital, £12k allowance), I'm assuming if I waited until the next tax year started I could then also cash out another £12k tax free
Yes, it is per year so your allowances don't carry over if you didn't use them. Gains are calculated on disposal of the asset. So if you sell an asset (whether that is in cash, trading it for another asset or whatever) the value at that point is what matters. So if you invested £10k in 1 Bitcoin for example, waited until it was worth £100k then sold it or swapped it for another coin then you'd pay tax on £90k less this year's allowance so £77.7k.
This bit is wrong. If you sold £22k then you are selling 22% of your asset so you can't take your initial £10k out tax free. You would calculate that as £2.2k investment, £22k realised so the gain would be £19.8k, £12.3k would be tax free and you'd pay tax on the other £7.5k.
£13,667 would be the maximum cash out amount for no capital gains tax (£1,367 + £12,300). Leaving you with £86,333.
