Every year you get a capital gains tax allowance—a level of profit that you’re allowed to generate on your investments before you pay tax. As I write this it’s worth £10,100 (in the tax year that runs from April 6th 2009 to April 5th 2010). That means you’re allowed to make £10,100 profit before you pay a penny in tax. But any profit you make above that is taxed.
