UK Capital Gains Tax: Rates, Allowance, and Reporting Deadlines

UK Capital Gains Tax is charged on the profit you make when you sell or dispose of an asset that has risen in value. From 6 April 2026, the rates are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers, and the first £3,000 of gains each tax year is tax-free.¹ Tax applies only to the gain, not the whole sale price, and several reliefs can reduce or eliminate what you owe.

What Triggers a CGT Charge

A charge is triggered by a disposal. That covers selling an asset, giving it away, swapping it, or receiving compensation when it is lost or destroyed.² Money does not need to change hands. Give an asset away and HMRC treats the disposal as happening at market value on the date of transfer, and calculates your gain from that figure.

An insurance payout works the same way. If jewellery worth £15,000 is stolen and the insurer settles, the payout replaces the sale price in your calculation. Any event that ends your ownership is potentially chargeable.

Which Assets Are Caught

Most valuable assets are within scope:

Personal possessions worth £6,000 or more, such as jewellery, art, antiques and collectibles. Cars are exempt unless used for business.³
Property that is not your main home, including buy-to-lets, holiday homes and land.
Shares and investments held outside tax-sheltered accounts. Anything inside an ISA or PEP is free of CGT.⁴
Business assets, including land, buildings, machinery and goodwill.
Cryptocurrency, treated the same as any other asset.

Inherit an asset and your base cost is its market value at the date of death (the probate value), not the original purchase price. Any gain built up during the previous owner’s lifetime is wiped clean, and you only pay tax on growth from the date you inherited.

The Rates From April 2026

From 6 April 2026, the old split between residential property gains and other gains is gone. All chargeable gains are taxed at the same two rates:¹

18% if your total taxable income and gains fall within the basic rate Income Tax band.
24% on anything above the basic rate band, and the flat rate for higher and additional rate taxpayers.

The rate depends on your total taxable income for the year, not just the gain. If your salary already uses most of your basic rate band, even a modest gain can be taxed at 24%. Add your taxable income and your gain together: the portion of the gain that fits within any remaining basic rate band is taxed at 18%, and the rest at 24%.¹

Trustees and personal representatives of deceased estates pay a flat 24% on all gains.⁵

The £3,000 Annual Exempt Amount

Every individual has a £3,000 tax-free allowance each tax year. You only pay CGT once your total gains for the year, after deducting losses and reliefs, exceed this figure.⁵ The allowance has been frozen at £3,000 since 2024/25 and still applies for 2026/27.

Where an asset is held jointly by a married couple or civil partners, each person can use their own £3,000 allowance against their share of the gain, effectively doubling the tax-free amount on a single disposal to £6,000. Unused allowance cannot be carried forward. If you don’t use it in a given tax year, it’s lost.

Most trustees get a smaller allowance of £1,500, though trusts for disabled people receive the full £3,000.⁵

How to Work Out the Gain

The taxable gain is not simply sale price minus purchase price. Several categories of cost can be deducted, which often cuts the figure you’re taxed on significantly. The formula is disposal proceeds, minus acquisition cost, minus allowable expenses.

Allowable costs fall into three groups:

Acquisition costs: the original price plus incidental buying expenses such as solicitor’s fees, surveyor’s fees and stamp duty at the time of purchase.
Improvement costs: money spent on work that enhanced the asset’s value and is still reflected in its condition when you sell. Building an extension counts. Redecoration and routine maintenance do not.⁶
Disposal costs: the expenses of selling, including estate agent commission, solicitor’s fees and share broker’s fees.

If you inherited the asset or received it as a gift, the acquisition cost is its market value when you received it (or the probate value for inheritances). Keep the receipts. HMRC can ask for evidence, and missing paperwork can cost you a legitimate deduction.

Using Losses to Reduce the Bill

Sell an asset for less than you paid and the loss can be set against gains in the same tax year. Current-year losses must be deducted in full before the Annual Exempt Amount is applied, even if that wastes some of the loss by pushing net gains below £3,000.⁷

Unused losses can be carried forward indefinitely. Brought-forward losses work more favourably: you only need to use enough to bring your net gain down to the £3,000 allowance, and any surplus stays banked.⁷

A loss must be claimed within four years of the end of the tax year in which it arose. Miss that window and it’s gone.

Transfers Between Spouses and Civil Partners

Transfers of assets between spouses or civil partners who live together happen at “no gain, no loss.” The recipient inherits the original owner’s base cost, so no CGT is triggered on the transfer itself.⁸ Tax only arises when the recipient later sells to a third party.

This is one of the simplest planning tools available. Moving an asset to a spouse who has unused basic rate band or an unused Annual Exempt Amount before a sale can noticeably cut the couple’s combined bill.

If a couple separates, no-gain/no-loss treatment continues until the earlier of two dates: the last day of the third tax year after they stopped living together, or the date a court grants a divorce, dissolution or annulment. Transfers made under a formal divorce agreement or court order are exempt from CGT with no time limit.⁹

Selling Your Main Home

The most valuable exemption for most people is Private Residence Relief, which removes CGT on the sale of your main home. If a property has been your only or main residence for the whole period you owned it, the entire gain is exempt.¹⁰ Full relief requires all of the following:

The property was your only or main home for the whole time you owned it.
You were not away beyond HMRC’s allowed absence periods, unless in job-related accommodation.
The grounds, including the house, do not exceed 0.5 hectares. Larger gardens may still qualify if the extra space is needed for reasonable enjoyment of the home.
No part of the property was used exclusively for business. A room used partly for work and partly for personal life does not spoil the relief.¹¹

Even if you fall short of the full period, the last nine months of ownership always qualify for relief provided the property was your main home at some point. For disabled people or care home residents that final exempt period stretches to 36 months.¹¹

Let out part or all of your home and Letting Relief may reduce the taxable portion. It is capped at the lowest of three amounts: the Private Residence Relief already calculated, £40,000, or the gain attributable to the letting period.

Business Asset Disposal Relief

Selling a qualifying business can attract Business Asset Disposal Relief, which cuts the CGT rate to 18% on gains up to a £1 million lifetime limit. Gains above the cap are taxed at normal rates. The 18% rate applies to disposals from 6 April 2026, after a transitional 14% rate during 2025/26.¹²

You must meet the qualifying conditions for a continuous two-year period ending on the date of disposal, or the date the business ceased if earlier. For a sole trade or partnership, you must be disposing of all or part of the business, or of assets used in it within three years of it ceasing. For shares in your personal company, you must be an officer or employee holding at least 5% of the ordinary shares, 5% of the voting rights and be entitled to at least 5% of the distributable profits and assets on winding up, with the company being a trading company or the holding company of a trading group.¹³

A separate scheme, Investors’ Relief, offers the same 18% rate and its own £1 million lifetime limit for external investors holding qualifying shares for at least three years.¹⁴ BADR is claimed on your tax return and must be filed by 31 January of the second year after the tax year of the disposal.

Selling Shares: The Matching Rules

Shares are more complicated because you may have bought the same company’s shares at different times and prices. When you sell, HMRC’s matching order decides which shares you’re treated as selling:¹⁵

Shares of the same class bought on the same day as the sale are matched first.
Next, shares bought within 30 days after the sale (the “bed and breakfast” rule, which stops people selling and immediately rebuying to crystallise a loss or gain).
Everything else sits in a Section 104 pool, valued at the average cost per share across every purchase in the pool.¹⁶

You cannot cherry-pick the batch that gives the best tax outcome. Keeping exposure to the same market sector without falling foul of the 30-day rule means buying shares in a different company or waiting more than 30 days before repurchasing.

Reporting and Paying

How you report depends on what you sold.

UK Residential Property

Sell a UK residential property with tax to pay and you must report and pay within 60 days of completion, using HMRC’s “Capital Gains Tax on UK property” online account.¹⁷ The clock starts on completion, not exchange. Non-UK residents must report every disposal of UK property, even where no tax is due.¹⁸

Other Assets

Gains on shares, personal possessions and other non-property assets can be reported through HMRC’s “real-time” Capital Gains Tax service after the disposal, or included in a Self Assessment tax return for the relevant year.¹⁹ For Self Assessment, payment is due by 31 January after the end of the tax year.²⁰

If your total gains for the year fall below £3,000 after losses, there is generally nothing to report.²¹

Penalties and Interest for Late Filing

Missing the 60-day property deadline triggers an automatic £100 late filing penalty. More than six months late adds a further £300 or 5% of the tax due, whichever is greater, and the same again after 12 months.

Late Self Assessment returns follow a similar pattern: £100 straight away, then daily penalties of £10 per day (up to £900) after three months, and 5% of the tax owed or £300 (whichever is greater) at the six-month and twelve-month marks.²² Late payment brings separate surcharges of 5% of the unpaid tax at 30 days, six months and twelve months.

Interest is charged on top. The late payment rate is currently 7.75%, set at the Bank of England base rate plus 4%.²³ Interest runs from the due date until HMRC receives payment and compounds on the unpaid balance. A few months of delay can add meaningfully to what you owe.

1
GOV.UK. Capital Gains Tax: Rates
2
HM Revenue & Customs. Capital Gains Manual – CG12700 – Disposal of Assets: Introduction
3
GOV.UK. Capital Gains Tax: Personal Possessions
4
HM Revenue & Customs. SAIM2310 – Interest: Exemptions: Tax-Free Savings Income: ISAs, PEPs and CTFs
5
GOV.UK. Capital Gains Tax Rates and Allowances
6
GOV.UK. Tax When You Sell Your Home: Work Out Your Gain
7
GOV.UK. Capital Gains Tax: If You Make a Loss
8
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Section 58
9
GOV.UK. HS281 Capital Gains Tax Civil Partners and Spouses (2024)
10
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Section 222
11
GOV.UK. HS283 Private Residence Relief (2025)
12
GOV.UK. Business Asset Disposal Relief
13
GOV.UK. HS275 Business Asset Disposal Relief (2026)
14
HM Revenue & Customs. Capital Gains Manual – CG63515 – Investors Relief: Rates From April 2025 and From April 2026
15
GOV.UK. HS284 Shares and Capital Gains Tax (2024)
16
Legislation.gov.uk. Taxation of Chargeable Gains Act 1992 – Section 104
17
GOV.UK. Report and Pay Your Capital Gains Tax – If You Sold a Property in the UK
18
GOV.UK. Report and Pay Your Capital Gains Tax: What You Need to Do
19
GOV.UK. Report and Pay Your Capital Gains Tax
20
GOV.UK. Self Assessment Tax Returns – Deadlines
21
GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances
22
GOV.UK. Self Assessment Tax Returns: Penalties
23
GOV.UK. Rates and Allowances: HMRC Interest Rates for Late and Early Payments