Capital Gains Tax for Higher Rate Taxpayers: Rates and Reporting

If you’re a higher rate taxpayer in the UK, you pay Capital Gains Tax at 24% on profits from selling shares, second homes, buy-to-lets, and most other chargeable assets. That single rate has applied to all asset types since 6 April 2025, when the Autumn Budget 2024 pulled non-property rates up to match the residential property rate. You fall into the higher rate band for CGT purposes once your total taxable income plus your gain crosses £50,270 in the tax year.¹

How Income and Gains Stack Together

HMRC doesn’t look at your gain in isolation. It sits on top of your taxable income, and whichever slice sits above £50,270 is taxed at 24%. The slice below is taxed at 18%.²

Take a worked example. Your salary is £45,000, which leaves £5,270 of unused basic rate band. You then realise a £20,000 gain. The first £5,270 of that gain fills up your remaining basic rate band and is taxed at 18%. The other £14,730 falls into the higher rate band and is taxed at 24%. Even people who think of themselves as basic rate taxpayers can find part of a large gain taxed at 24% for this reason. The reverse is also worth knowing: if your income already exceeds £50,270, every pound of your taxable gain attracts 24%.

Above £125,140 you enter the additional rate band for income tax, but the CGT rate stays at 24%. The £50,270 and £125,140 thresholds are frozen until at least April 2028.¹

The £3,000 Annual Exempt Amount

Every individual gets a £3,000 CGT-free allowance for the 2025–26 tax year. Trustees get £1,500.³ You deduct this from your total gains for the year before applying the 24% rate.

The allowance is use-it-or-lose-it. If you don’t realise any gains before 5 April, the £3,000 disappears. It cannot be carried forward or backward. If your total gains for the year stay under £3,000, no CGT is owed, though a report may still be needed if your total sale proceeds exceeded £50,000 and you’re registered for Self Assessment.⁴

Two Exceptions to the 24% Rate

Fund managers pay 32% on carried interest gains regardless of their income tax band.³

If you’re selling all or part of a business, Business Asset Disposal Relief can bring the rate down. Qualifying gains are taxed at 14% for disposals in 2025–26, rising to 18% from April 2026, subject to a £1 million lifetime limit.⁵

Working Out the Taxable Gain

The calculation is sale proceeds, minus what you paid for the asset, minus allowable costs, minus your £3,000 annual exempt amount. Anything left is taxed at 24% (or partly at 18% if you have unused basic rate band).

For property, allowable costs include solicitor and conveyancing fees, surveyor fees, estate agent commissions, and the Stamp Duty Land Tax you paid when you bought the property. Money spent on permanent improvements such as an extension or loft conversion also counts, but routine maintenance like repainting or fixing a leaking tap does not.⁶⁷ For shares, broker commissions and any Stamp Duty Reserve Tax paid on the purchase come off the gain.

If you inherited the asset, your acquisition cost is the probate value on the date the previous owner died, not what they originally paid. You only pay CGT on the increase between that value and your eventual sale price.

Ways to Reduce the Bill

Use Capital Losses

Losses on other disposals reduce your taxable gains. Current-year losses come off first and can wipe out your gain entirely, even below the £3,000 allowance. Losses carried forward from earlier years come off next, but only enough to bring the taxable gain down to £3,000, so the annual allowance isn’t wasted.⁸

You have four years from the end of the tax year in which you made a loss to report it to HMRC. Miss that window and the loss is gone. Once claimed, losses carry forward indefinitely. If you’re not in Self Assessment, you can claim a loss by writing to HMRC.⁸

Transfer to a Spouse or Civil Partner Before Selling

Transfers between spouses or civil partners who are living together happen at no gain, no loss for CGT purposes. The receiving partner inherits the original acquisition cost.⁹

The planning angle matters if one of you is a higher rate taxpayer and the other isn’t. Transferring the asset to the lower-earning partner before the sale can move some or all of the gain into the 18% band. After separation, the no gain/no loss treatment continues until the earlier of three years after you stopped living together or the date the divorce or dissolution is finalised by court order.⁹

Check Whether Private Residence Relief Applies

Your main home is normally exempt from CGT under Private Residence Relief, so long as you lived there as your only home for the whole ownership period, didn’t let any part of it, didn’t use any part exclusively for business, and the grounds are under 5,000 square metres.¹⁰ Fall short on any of those conditions and a proportionate share of the gain becomes taxable. Married couples and civil partners can only nominate one main home between them at any given time.

Reporting and Paying

60 Days for UK Residential Property

If you sell a UK residential property and owe CGT, you must report and pay within 60 days of completion using HMRC’s Capital Gains Tax on UK Property account. You’ll need a Government Gateway ID.¹¹ The clock starts from completion, not exchange, and 60 days is tight once you factor in gathering purchase records and improvement receipts. If you’re in Self Assessment, you still include the disposal on your annual return; the 60-day report supplements the return, it doesn’t replace it.

Self Assessment for Other Assets

Gains from shares, cryptoassets, collectibles, and other non-property assets go on your Self Assessment return. For the 2025–26 tax year, the filing and payment deadline is 31 January 2027.

Late Filing Penalties

Missing either deadline triggers an immediate £100 fixed penalty, even if no tax is owed.¹² Further penalties stack on if you go six or twelve months past the deadline, and daily interest runs on any unpaid tax from the date it was due.

1
HM Revenue & Customs. Income Tax Personal Allowance and the Basic Rate Limit From 6 April 2026 to 5 April 2028
2
GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances
3
HM Revenue & Customs. Capital Gains Tax Rates and Allowances
4
GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances
5
HM Revenue & Customs. HS275 Business Asset Disposal Relief (2025)
6
HM Revenue & Customs. CG15250 – Expenditure: Incidental Costs of Acquisition and Disposal
7
GOV.UK. Tax When You Sell Your Home: Work Out Your Gain
8
GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances – Losses
9
HM Revenue & Customs. HS281 Capital Gains Tax Civil Partners and Spouses (2024)
10
GOV.UK. Tax When You Sell Your Home: Private Residence Relief
11
GOV.UK. Report and Pay Your Capital Gains Tax: If You Sold a Property in the UK on or After 6 April 2020
12
HM Revenue & Customs. Penalties for Failure to File Returns on Time – CC/FS18a