Capital Gains Tax 2025-26: Rates, Allowance, and Reliefs

For the 2025-26 UK tax year, Capital Gains Tax on most disposals is charged at 18% within the basic rate band and 24% above it, after a tax-free Annual Exempt Amount of £3,000. The tax year runs from 6 April 2025 to 5 April 2026, and the old 10% and 20% rates that used to apply to shares and other non-property assets no longer exist: from 6 April 2025, all chargeable assets sit on the same rate scale.¹

What Counts as a Disposal

Capital Gains Tax applies to the profit on a disposal, not the sale proceeds themselves. A disposal happens when you sell an asset, give it away to anyone other than your spouse or civil partner, swap it for something else, or receive compensation for it. The taxable amount is the difference between what you paid and what you received, or the market value at the time of transfer for gifts.

The main assets in scope include second homes, buy-to-let properties, holiday homes, and land not covered by Private Residence Relief; shares, bonds, and fund units held outside ISAs; jewellery, paintings, antiques, coins, and other personal possessions sold for more than £6,000; business assets such as land, buildings, machinery, and goodwill; and cryptocurrency, NFTs, and other digital holdings.

Personal possessions worth £6,000 or less at disposal fall outside the charge entirely, and private cars are exempt unless you used them for business.² Shares and funds inside an ISA are exempt too. If you are UK-resident, gains on overseas assets count even if the money never enters the UK.

The Rates for 2025-26

Two rates apply to individuals for the year:¹

18% where the gain falls within the basic rate band
24% on any portion above it

Which rate applies depends on stacking your gain on top of your taxable income. The basic rate band for 2025-26 is £37,700. If your taxable income (from employment, pensions, and savings, after the Personal Allowance) already uses up that band, the whole gain is taxed at 24%. If some of the band remains, the part of your gain that fits inside it is taxed at 18% and the balance at 24%.¹

Trustees and personal representatives of deceased estates pay 24% from the first pound of gain, without any basic rate band calculation.³

Fund managers receiving carried interest face a separate 32% rate from 6 April 2025. The government has said it plans to move carried interest out of the CGT regime entirely from April 2026 and tax it as deemed trading income.

The £3,000 Annual Exempt Amount

Every individual has a £3,000 tax-free allowance for 2025-26. It applies to your total gains across all disposals in the year, not to each asset separately. If your combined gains stay at or below £3,000, no tax is due and you may not need to report at all.³

Most trusts get a smaller £1,500 allowance, though trusts for disabled people receive the full £3,000.³

Two points catch people out. The allowance cannot be carried forward, so anything unused by 5 April 2026 is lost. And it has been frozen at £3,000 since 2024-25, down from £6,000 the previous year and £12,300 before that, so it shelters far less than it used to. Spouses and civil partners each have their own £3,000, so a couple planning disposals together can shield up to £6,000 between them.

Working Out the Gain

Start with the disposal proceeds, or the market value if you gave the asset away. Subtract your allowable costs: the original purchase price, buying costs such as legal fees and stamp duty, and spending on capital improvements that added value. Routine maintenance and repairs do not count.⁴

That gives your total gain. Deduct any capital losses, then the £3,000 Annual Exempt Amount. What remains is the taxable gain, which is stacked on your taxable income to determine the rate.¹

Keep every receipt, invoice, and contract note. HMRC can ask for documentation years after a disposal, and without records you may end up paying tax on a larger gain than you actually made.

Inherited and Gifted Assets

If you inherited an asset, your cost basis is generally the market value at the date of the previous owner’s death, not what they originally paid. This uplift can reduce or eliminate the gain when you sell. For an asset received as a gift (other than from a spouse), the cost basis is usually the market value at the date of the gift, though Gift Hold-Over Relief may defer the gain in some cases involving business assets or assets on which Inheritance Tax was charged.

Reliefs That Reduce or Remove the Bill

Private Residence Relief

Your main home is normally fully exempt through Private Residence Relief. The relief covers the dwelling plus gardens and grounds up to half a hectare, provided the property has been your only or main residence throughout your ownership.

If you lived there for part of the ownership period only, the gain is split proportionally: the period you occupied it is exempt, and the rest is taxable. The final nine months of ownership always qualify for relief so long as the property was your main home at some point, and that final period extends to 36 months if you moved into a care home. Lettings Relief now only applies where you shared the property with a tenant, so most former landlords no longer benefit.

Business Asset Disposal Relief

Selling all or part of a qualifying business, or shares in your personal trading company, can bring your rate down through Business Asset Disposal Relief. From 6 April 2025, the relief rate is 14%, up from 10% before that date.⁵ There is a £1 million lifetime cap on qualifying gains per individual, and you must have owned the business or shares for at least two years before the disposal.

Investors’ Relief works similarly for external investors in unlisted trading companies. Its lifetime limit was reduced to £1 million for disposals from 30 October 2024 onward, down from £10 million.⁶

Transfers Between Spouses and Civil Partners

Assets transferred between spouses or civil partners living together move on a “no gain, no loss” basis. The receiver inherits the original cost, and no tax is triggered at the point of transfer.⁷ The exemption does not apply if you separated and did not live together at all during the tax year. Moving an asset to a spouse with unused basic rate band or an unused £3,000 allowance before a sale is one of the simplest ways to reduce a joint tax bill.

Using Capital Losses

Selling an asset for less than you paid produces a capital loss that offsets gains in the same tax year. Current-year losses must be set against current-year gains first, even if this uses up part of the Annual Exempt Amount. Any surplus can be carried forward indefinitely.

Losses cannot be carried back, apart from a narrow rule for disposals in the part of the tax year before someone’s death. If you do not file a Self Assessment return, you need to notify HMRC of losses in writing. A loss must be claimed within four years of the end of the tax year in which it arose, so a 2025-26 loss must be claimed by 5 April 2030.

Useful to know: carried-forward losses only need to be used to the extent gains exceed the Annual Exempt Amount, but current-year losses do not have that flexibility. Timing disposals across tax years can matter for that reason.

Reporting and Paying

The rules split into two tracks depending on the asset.

UK Residential Property: 60 Days

If you sold UK residential property and owe CGT, you must report and pay within 60 days of the completion date through HMRC’s Capital Gains Tax on UK property service.⁸ The clock runs from completion, not exchange, so purchase records and improvement costs need to be at hand. If you also complete a Self Assessment return, include the disposal there too and any tax already paid is credited against the final liability.

Everything Else: Self Assessment by 31 January 2027

Gains on shares, personal possessions, and other non-property assets go on your Self Assessment return. The online filing and payment deadline for 2025-26 is 31 January 2027.⁹

Late Filing Penalties

Missing either deadline triggers an escalating penalty structure:¹⁰

Immediately: £100 fixed penalty
After 3 months: £10 per day, up to £900
After 6 months: 5% of the tax due or £300, whichever is greater
After 12 months: a further 5% of the tax due or £300, whichever is greater

Interest also runs on unpaid tax from the original due date. On a sizeable property gain where the 60-day deadline slipped by several months, penalties and interest can add up quickly.

Non-Residents Selling UK Property

If you are not UK-resident, CGT still applies to disposals of UK property and land. Non-residents must report every UK property disposal within 60 days, whether or not any tax is due and even where the disposal produced a loss.¹¹ The obligation applies whether or not you are registered for Self Assessment. Non-resident companies disposing of UK land and property pay Corporation Tax on those gains, not CGT, and report through a Corporation Tax return.

1
GOV.UK. Capital Gains Tax – What You Pay It On, Rates and Allowances
2
GOV.UK. Capital Gains Tax on Personal Possessions – What You Pay It On
3
GOV.UK. Capital Gains Tax Rates and Allowances
4
GOV.UK. Valuation Office – Capital Gains and Other Taxes Manual – Section 5
5
GOV.UK. Business Asset Disposal Relief – Eligibility
6
GOV.UK. Investors’ Relief 2025 (HS308)
7
GOV.UK. Capital Gains Tax – What You Pay It On, Rates and Allowances – Gifts
8
GOV.UK. Report and Pay Your Capital Gains Tax – If You Sold a Property in the UK on or After 6 April 2020
9
GOV.UK. Self Assessment Tax Returns – Deadlines
10
GOV.UK. Self Assessment Tax Returns – Penalties
11
GOV.UK. Tell HMRC About Capital Gains Tax on UK Property or Land if You’re Not a Resident in the UK