The short answer
- The first £3,000 of gains each tax year is tax-free.
- Gains are taxed at 18% within your unused basic-rate band and 24% above it.
- The same rates apply to shares, property and most other assets.
- Business Asset Disposal Relief gives 18% on qualifying business sales from 6 April 2026.
- Gains inside ISAs and pensions, and on your main home, are usually tax-free.
What Capital Gains Tax is
Capital Gains Tax applies when you “dispose” of an asset: selling it, giving it away, swapping it, or receiving compensation for it. You pay tax on the gain, not on the whole amount you receive. Gifts are treated as if you sold at market value, except gifts to a spouse, civil partner or charity.
UK residents pay Capital Gains Tax on assets anywhere in the world. Companies pay Corporation Tax on their gains instead.
Working out the gain
The gain is what you received, less what you paid and the costs of buying, improving and selling.
- Sale price£60,000
- Less purchase price−£30,000
- Less costs−£500
Allowable costs include broker fees, stamp duty, legal fees, estate agent fees and the cost of improvements that add value. Repairs, maintenance, mortgage interest and the costs of owning the asset are not allowed.
Rates and the annual exempt amount
| Within the basic-rate band | Above it | |
|---|---|---|
| Shares, funds, crypto, other assets | 18% | 24% |
| Residential property | 18% | 24% |
| Business Asset Disposal Relief | 18% | 18% |
| Investors' Relief | 18% | 18% |
The annual exempt amount was cut from £12,300 to £6,000 in April 2023, and to £3,000 in April 2024. It cannot be carried forward, so it is lost if you do not use it in the tax year.
How your income sets the rate
Your taxable income, including savings and dividends, uses up the basic-rate band first. Gains then fill whatever is left at 18%, with the rest at 24%. Scottish taxpayers use the UK bands for gains, not the Scottish ones.
Pension contributions and Gift Aid help
Personal pension contributions and Gift Aid donations extend your basic-rate band, which means more of a gain can be taxed at 18%.
Worked examples
- Gain£29,500
- Annual exempt amount−£3,000
- Basic-rate band left: £37,700 − £32,430£5,270
- £5,270 at 18%£949
- £21,230 at 24%£5,095
| Gain | Salary £30,000 | Salary £70,000 |
|---|---|---|
| £5,000 | £360 | £480 |
| £10,000 | £1,260 | £1,680 |
| £20,000 | £3,060 | £4,080 |
| £50,000 | £10,064 | £11,280 |
| £100,000 | £22,064 | £23,280 |
Using losses
Losses made in the same tax year are set against gains in full, even if that wastes the annual exempt amount. Unused losses carry forward indefinitely, but you must report them to HMRC within four years of the end of the tax year you made them. Brought-forward losses are only used to bring your gains down to the exempt amount, so the allowance is not wasted.
- Gains less this year's losses£8,000
- Brought-forward losses used£5,000
- Left to set against the exempt amount£3,000
Property
Your main home is usually exempt through Private Residence Relief. Second homes and buy-to-let properties are taxed at 18% and 24%. If you lived in a property for part of the time you owned it, part of the gain is exempt, and the final 9 months of ownership always qualify. The property Capital Gains Tax calculator covers this in detail.
Report within 60 days
UK residents must report and pay tax on a UK residential property sale within 60 days of completion.
Cryptoassets
Selling, swapping one token for another, or spending crypto are all disposals. The same pooling rules as shares apply. Keep records of every transaction in pounds at the time. From 2026, UK crypto platforms report customers’ transactions to HMRC under international reporting rules, so gains are easier for HMRC to spot.
Business Asset Disposal Relief
If you sell all or part of a trading business, or shares in your own trading company where you hold at least 5% and work for it, gains up to a £1 million lifetime limit are taxed at the reduced rate. The rate rose from 10% to 14% in April 2025 and to 18% from 6 April 2026.
- Gain less exempt amount£497,000
- At 18%£89,460
What is exempt
- Wrappers
- ISAs and pensions
- Home
- Your main home
- Government bonds
- Gilts and Premium Bonds
- Personal items
- Cars, and items under £6,000
- Investments
- Shares and funds outside ISAs
- Property
- Second homes and buy-to-let
- Crypto
- All disposals
- Valuables
- Items over £6,000
Ways to reduce the bill
- Use the £3,000 exempt amount every year, selling gradually rather than all at once.
- Split a sale across two tax years, either side of 5 April, to use two exempt amounts and two basic-rate bands.
- Transfer assets to a spouse or civil partner before selling, so both allowances and bands are used.
- Pay into a pension or give to charity with Gift Aid to extend your basic-rate band.
- Move investments into an ISA each year using “bed and ISA”.
- Claim all allowable costs and report losses.
| Approach | Tax |
|---|---|
| Sell everything in one tax year | £6,044 |
| Half now, half after 5 April | £5,008 |
| Give half to a spouse earning £20,000 first | £4,619 |
Reporting and paying
- Within 60 daysUK residential property
Report and pay through a Capital Gains Tax on UK property account.
- By 31 JanuaryOther gains
In your Self Assessment return for the tax year.
- Any timeReal-time service
If you do not file a tax return, report gains as they happen.
You must report gains if your total proceeds are over £50,000, even if no tax is due, or if you have a gain above the exempt amount.
Spouses and civil partners
Transfers between spouses or civil partners who live together are treated as giving neither gain nor loss. The receiving partner takes over the original cost. That means a couple can put assets into the name of whoever pays less tax, or share them so that both annual exempt amounts and both basic-rate bands are used. The transfer must be a genuine gift with no strings attached.
Separating couples have until the end of the third tax year after they stop living together to transfer assets without a gain, and longer where transfers are part of a formal divorce agreement.
Gifts of business assets
If you give away business assets or shares in an unlisted trading company, you and the person receiving them can claim gift holdover relief. The gain is not taxed now; instead it reduces the recipient’s base cost, so tax is paid when they eventually sell. Gifts into most trusts can also qualify for holdover relief.
EIS and SEIS
Shares bought under the Enterprise Investment Scheme or Seed Enterprise Investment Scheme are free of Capital Gains Tax if held for at least 3 years and the income tax relief was given. Investing a gain in EIS shares can defer the tax on that gain until the EIS shares are sold, and SEIS can exempt half of a reinvested gain. These are high-risk investments in small companies, so the tax relief should not be the only reason to invest.
Employee share schemes
Shares from Save As You Earn (Sharesave) and Share Incentive Plans can be moved into an ISA within set time limits, sheltering future gains. Enterprise Management Incentive options can qualify for Business Asset Disposal Relief without the 5% holding test. Shares from other schemes may have been taxed as income when you received them, which increases your base cost, so check payslips and award letters.
Moving abroad and non-residents
Non-residents pay UK Capital Gains Tax on UK land and property, but generally not on shares. If you leave the UK for fewer than five full tax years, gains made while abroad on assets you owned before leaving can be taxed when you return. Get advice before selling large holdings around a move abroad.
Keeping records
- Contract notes or statements showing what you paid and when.
- Dividend reinvestment and fund statements for accumulation units.
- Receipts for improvements to property, and solicitor’s completion statements.
- For crypto, a record of every trade in pounds, including fees.
Keep records for at least a year after the Self Assessment deadline, and longer for assets you still own.
Timing a sale
The tax year ends on 5 April. Selling on 6 April instead of 5 April gives you a new exempt amount and a fresh basic-rate band, and delays the payment deadline by a year. In a year when your income is lower, such as after retiring or during a career break, more of a gain falls into the 18% band.
Inherited assets
When you inherit something, your base cost for Capital Gains Tax is its value at the date of death, as agreed for probate. Any rise in value before then is never taxed as a gain. If you sell soon after inheriting, there is usually little or no gain. Executors who sell assets during the administration of an estate pay Capital Gains Tax themselves, with their own exempt amount in the tax year of death and the two following years.