Key points
- You pay CGT on the gain, not on the whole amount you receive.
- The first £3,000 of net gains in a tax year is tax-free (2024/25 to 2026/27).
- Gains above the allowance are taxed at 18% within your unused basic rate band and 24% above it. The same rates apply to residential property, shares and other assets.
- UK residential property with tax to pay: report and pay within 60 days of completion. Other gains go through Self Assessment or HMRC's real-time CGT service.
What is a capital gain?
A capital gain is the difference between what you paid for an asset and what you got when you disposed of it, after deducting allowable costs. For example, if you bought shares for £5,000 and sold them for £10,000, your gain is £5,000 before any costs.
A disposal is wider than a sale. It includes:
- Selling an asset
- Giving it away or transferring it
- Swapping it for something else
- Receiving compensation for it, such as an insurance payout
When you give an asset away, or sell it for less than it is worth to help the buyer, you usually use its market value instead of the price.
What Capital Gains Tax applies to
According to HMRC, you may have to pay CGT when you dispose of:
- Property that is not your main home, such as a buy-to-let flat, a second home, land or commercial premises. See our guide to selling a rental property.
- Your main home, if you let it out, used part of it only for business, or it is very large (grounds over 5,000 square metres in total).
- Shares and fund units that are not held in an ISA or PEP.
- Cryptoassets: selling them, exchanging one cryptoasset for another, using them to pay for goods or services, or giving them away.
- Business assets, such as premises, goodwill, or shares in your company. See Business Asset Disposal Relief.
- Personal possessions sold for £6,000 or more, apart from your car. This covers things such as jewellery, paintings, antiques and stamp collections. Items that make up a set are treated together.
If you inherit an asset, there is no CGT at the time of death. When you later sell it, your cost is its value at the date of death (normally the value used for Inheritance Tax).
If you are UK resident, gains on assets abroad are also taxable in the UK. Read foreign income and Self Assessment.
What is exempt
You do not pay CGT on gains from:
- ISAs and PEPs
- UK government gilts and Premium Bonds
- Betting, lottery or pools winnings
- Your own car, unless you used it for business
- Possessions with a predictable life of 50 years or less, such as clocks, unless capital allowances were or could have been claimed on them
- Your main home, where Private Residence Relief covers the whole period
- Carried interest, from 6 April 2026, because it is now taxed as income
Assets held in a registered pension scheme are also outside CGT while they stay in the scheme.
Gifts to your husband, wife or civil partner, and to a charity, do not usually create a CGT charge. Since 6 April 2023, separating couples can transfer assets between them without a gain for up to three tax years after the year they stop living together, and without a time limit under a formal divorce agreement.
The annual exempt amount
Each individual has a tax-free allowance, called the annual exempt amount. You pay CGT only on net gains above it.
| Tax year | Individuals | Most trusts |
|---|---|---|
| 2023/24 | £6,000 | £3,000 |
| 2024/25 | £3,000 | £1,500 |
| 2025/26 | £3,000 | £1,500 |
| 2026/27 | £3,000 | £1,500 |
The allowance cannot be carried forward. Spouses and civil partners each have their own allowance, so owning assets jointly can mean two allowances are available when the asset is sold.
Capital Gains Tax rates for 2025/26 and 2026/27
For individuals, the rate depends on your taxable income. Add your taxable gains (after the allowance) on top of your taxable income:
- the part that falls within your unused basic rate band (£37,700 for 2026/27) is taxed at 18%
- the rest is taxed at 24%
These rates apply to all chargeable assets, including residential property, in both 2025/26 and 2026/27.
| 2025/26 | 2026/27 | |
|---|---|---|
| Individuals: basic rate band | 18% | 18% |
| Individuals: above the basic rate band | 24% | 24% |
| Trustees and personal representatives | 24% | 24% |
| Business Asset Disposal Relief and Investors' Relief | 14% | 18% |
| Carried interest | 32% | Income Tax and National Insurance instead of CGT |
Your basic rate band can be extended by personal pension contributions paid net of tax and by Gift Aid donations, which can leave more of a gain in the 18% band. This describes the tax effect only; for pension or investment advice, speak to an FCA-authorised financial adviser.
How to work out your gain
- ProceedsTake the disposal proceeds (or market value, where that applies).
- CostDeduct what you paid for the asset (or its market value when you received it).
- Allowable costsDeduct fees for buying and selling (for example broker, legal or estate agent fees, stamp duty) and the cost of improvements, but not repairs or maintenance.
- Add upRepeat for each asset and add the gains together.
- LossesDeduct allowable losses.
- AllowanceDeduct the £3,000 annual exempt amount.
- RatesApply 18% and 24% as explained above.
For shares in the same company bought at different times, you usually use the average cost of your holding. Special matching rules apply if you buy shares of the same type on the same day as you sell, or within the following 30 days. HMRC helpsheet HS284 explains them.
Illustrative numbers, 2026/27. Anna is employed with a salary of £45,000 and the standard personal allowance of £12,570, so her taxable income is £32,430. Her unused basic rate band is £37,700 − £32,430 = £5,270. In the tax year she sells shares in Company A for £30,000. She paid £16,000 for them and £200 in dealing fees in total. She also sells shares in Company B at a loss of £1,800.
| Step | Amount |
|---|---|
| Gain on Company A: £30,000 − £16,000 − £200 | £13,800 |
| Less loss on Company B | −£1,800 |
| Net gains | £12,000 |
| Less annual exempt amount | −£3,000 |
| Taxable gains | £9,000 |
| £5,270 × 18% | £948.60 |
| £3,730 × 24% | £895.20 |
| Capital Gains Tax | £1,843.80 |
Anna's gains are above the allowance, so she must report them, either through Self Assessment or the real-time service.
Losses
If you dispose of an asset for less than it cost, you may have an allowable loss. To use it, you must report it to HMRC within 4 years of the end of the tax year in which you disposed of the asset.
Losses are set first against gains in the same tax year, even if that wastes part of your allowance. Unused losses are carried forward. Losses from earlier years are only used to bring your gains down to the allowance, and the rest stays available for later years.
You cannot usually use a loss on a disposal to a family member or another connected person, except against gains on disposals to that same person.
Selling your home: Private Residence Relief
You do not pay CGT when you sell your home if all of these apply:
- It has been your only or main home for the whole time you owned it
- You have not let part of it out (a lodger does not count)
- You have not used part of it only for business
- The grounds are under 5,000 square metres in total
If those conditions are not met for the whole period, you may get part of the relief. The last 9 months of ownership always qualify if the home was your main residence at some point. If you are disabled or in long-term residential care and own only one home, the last 36 months qualify. Some periods of absence, for example working away, can also count.
Letting Relief is only available where you lived in the home at the same time as your tenants. It is capped at £40,000. If you have let out a former home, see selling a rental property.
How and when to report and pay
If you are a UK resident and there is CGT to pay, report and pay within 60 days of completion using a Capital Gains Tax on UK property account. If you are in Self Assessment, include the sale on your return too. Non-residents must report every disposal of UK property or land, even with no tax to pay.
Other assets: in Self Assessment
- Report the gains on your tax return.
- The online return and payment deadline is 31 January after the end of the tax year.
- Also report disposals where the total amount you sold assets for was more than £50,000, even if your gains are within the allowance.
- Report losses if you want to use them.
Other assets: not in Self Assessment
- You can use HMRC's real-time CGT service.
- Report by 31 December after the tax year and pay by 31 January.
- For a gain made in 2025/26: report by 31 December 2026 and pay by 31 January 2027.
Keep records of purchase and sale documents, costs and valuations. For cryptoassets, exchange reports do not track your pooled cost, so you need your own records. If you would like us to prepare the return, see Self Assessment.
What changed recently
- 6 April 2024The annual exempt amount fell from £6,000 to £3,000. The higher rate for residential property fell from 28% to 24%.
- 30 October 2024The main rates for other assets rose from 10% and 20% to 18% and 24%. Since then one pair of rates applies to all assets.
- 6 April 2025Business Asset Disposal Relief and Investors' Relief rose from 10% to 14%. Carried interest rose to 32%.
- 6 April 2026Business Asset Disposal Relief and Investors' Relief rose to 18%. Carried interest left CGT and is now subject to Income Tax and National Insurance.
Carried interest is the share of a fund's profits paid to investment fund managers once investors have received their capital and an agreed minimum return. It mainly affects private equity and venture capital managers, who should take specialist advice on the new regime.
Frequently asked questions
What is the Capital Gains Tax allowance for 2026/27?
£3,000 for individuals, the same as in 2024/25 and 2025/26. It cannot be carried forward.
Is the rate different for residential property?
No. Since 30 October 2024 the same rates apply to all assets: 18% within the basic rate band and 24% above it.
Do I pay CGT if I sell my car?
Not on your personal car, unless you used it for business.
My gain is under £3,000. Do I need to tell HMRC?
Usually not. But if you are in Self Assessment and sold assets for more than £50,000 in total, you must report them. You must also report a loss if you want to use it.
Can I spread a sale over two tax years to use two allowances?
Sometimes, for example selling part of a holding in March and the rest in April. For CGT the disposal date is normally the date of an unconditional contract, not completion. For shares, the 30-day rule applies if you buy back the same shares.
What to prepare
0 of 5 ready
One piece of advice
Keep the purchase documents, costs and dates for every asset from the day you buy it. Working out a gain years later without them is hard, and HMRC can ask to see them.
Test yourself
1. What is the annual exempt amount for an individual in 2026/27?
It has been £3,000 since 2024/25.
2. Your gain falls above your basic rate band. What rate applies in 2026/27?
18% within the unused basic rate band, 24% above it, for all assets.
3. Which of these is exempt from CGT?
UK gilts and Premium Bonds are exempt.
4. You are not in Self Assessment and made a taxable gain on shares in 2025/26. By when must you report it through the real-time service?
Report by 31 December after the tax year and pay by 31 January.
Law and sources
- GOV.UK: Capital Gains Tax rates and allowancesAllowances and rates by year
- GOV.UK: Capital Gains TaxOverview, what you pay it on, losses, reporting
- GOV.UK: Report and pay your Capital Gains TaxThe real-time service
- GOV.UK: Capital Gains Tax on UK propertyThe 60-day report and payment
- GOV.UK: Tax when you sell your homePrivate Residence Relief
- GOV.UK: Capital Gains Tax on personal possessionsThe £6,000 rule and exempt items
- GOV.UK: CryptoassetsWhen crypto disposals are taxed
- GOV.UK: Separation and divorceTransfers between separating spouses
- HMRC HS284: Shares and Capital Gains TaxShare matching rules
- Taxation of Chargeable Gains Act 1992The main law
This guide explains the rules in general terms as at 9 October 2026. It is not advice for your situation. Rules and rates change.
