Answers · UK 2025/26

How much capital gains tax do I pay on £20,000 profit?

On a £20,000 gain in 2026/27, the first £3,000 is tax-free under the annual exempt amount, leaving £17,000 taxable. A basic-rate taxpayer pays 18% and a higher-rate taxpayer 24% on most assets -- £3,060 to £4,080 depending on your income.

Last updated: 10 July 2026Last reviewed: 10 July 2026How we verify

Full answer

Capital Gains Tax (CGT) for 2026/27 has an annual exempt amount of just £3,000. On a £20,000 gain, £17,000 is taxable. The rate depends on where the gain sits when stacked on top of your income: 18% within the basic-rate band and 24% above it, for both residential property and other chargeable assets such as shares or a second home, since the rates were equalised from October 2024. Worked example: a higher-rate taxpayer with a £20,000 gain pays 24% x £17,000 = £4,080. A basic-rate taxpayer with enough unused basic-rate band pays 18% x £17,000 = £3,060, though the gain itself often pushes part of it into the 24% band once added to income, so the effective bill can land in between. CGT is reported and paid via Self Assessment, except UK residential property gains, which must be reported and paid within 60 days of completion. Spouses can transfer assets between them tax-free before selling, effectively doubling the exempt amount to £6,000 between a couple. Use the Capital Gains Tax calculator to compute your exact liability based on your income and the timing of the disposal.