Answers · UK 2025/26

How much capital gains tax do I pay on £40,000 profit?

On a £40,000 gain in 2026/27, the first £3,000 is tax-free under the annual exempt amount, leaving £37,000 taxable. A basic-rate taxpayer pays 18% and a higher-rate taxpayer 24% on most assets -- £6,660 to £8,880 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 £40,000 gain, £37,000 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. Worked example: a higher-rate taxpayer with a £40,000 gain pays 24% x £37,000 = £8,880. A basic-rate taxpayer with enough unused basic-rate band pays 18% x £37,000 = £6,660, but a gain of this size is fairly likely to push at least part of it into the 24% band once combined with income, so the real bill for many basic-rate taxpayers lands somewhere between the two figures. CGT on UK residential property must be reported and paid within 60 days of completion; for other assets it is reported via Self Assessment by the normal filing deadline. Spreading a large disposal across two tax years, where possible, can use two separate £3,000 exempt amounts and potentially keep more of the gain within the lower-rate band. Use the Capital Gains Tax calculator to model your exact position.