Capital Gains Tax Residential vs Shares UK 2025/26

Quick answer

Capital gains tax on a UK residential property and on listed shares now uses the same rate ladder in 2025/26:

• 18% on gains within any unused basic-rate band (taxable income up to £50,270).
• 24% on gains above that point.

The Spring Budget 2024 cut the residential higher rate from 28% to 24% from 6 April 2024 — completing a multi-year alignment between property and other assets. Carried interest, Business Asset Disposal Relief and trust gains continue to follow their own ladders, but for ordinary individuals the headline rates are now identical.

What still differs:

• Reporting: residential property completions trigger a 60-day clock; shares wait for Self Assessment.
• Reliefs: Private Residence Relief on a home; share-matching and ISA wrappers on equities.
• Allowable costs: stamp duty and improvement spend on property; broker fees and stamp duty reserve tax on shares.

The aligned 2025/26 rate ladder

The basic-rate band runs to £50,270 of taxable income. If your wages take you to £45,000 (taxable income £32,430 after the £12,570 Personal Allowance), you have £17,840 of unused basic-rate band left. The first £17,840 of a gain — after deducting the £3,000 annual exempt amount — is taxed at 18%; the rest at 24%.

Worked example 1 — £40,000 share gain

Priya is a higher-rate taxpayer with taxable income of £60,000 (so no basic-rate band left). She sells listed FTSE shares for a £40,000 gain in 2025/26.

• Gain: £40,000.
• Annual exempt amount: £3,000.
• Chargeable gain: £37,000.
• CGT at 24%: £8,880.

Priya keeps £31,120 of the gain. She reports the disposal on her 2025/26 Self Assessment return, due 31 January 2027. She pays the CGT alongside her income-tax balancing payment.

If Priya instead earned £35,000 (taxable income £22,430), she has £27,840 of basic-rate band available. The first £27,840 of chargeable gain would be taxed at 18% (£5,011) and the remaining £9,160 at 24% (£2,198), giving total CGT of £7,209. The unused basic-rate band has saved her £1,671.

Worked example 2 — £40,000 buy-to-let gain

James sells a former buy-to-let flat in October 2025 with a £40,000 chargeable gain. He is on a £65,000 salary, also a higher-rate taxpayer.

• Gain: £40,000.
• Annual exempt amount: £3,000.
• Chargeable gain: £37,000.
• CGT at 24%: £8,880.

Same arithmetic, same final bill — but the cashflow and admin are different.

• Day 0 (completion): 60-day clock starts.
• By day 60: James must file a UK Property Disposal return through his Government Gateway and pay the estimated CGT — roughly £8,880 — within the same window.
• Following January: he reports the disposal again on his Self Assessment, reconciling against actual income and any further allowable costs.

Filing late costs £100, then £10 per day after 90 days, plus interest on unpaid CGT. The 60-day rule is the trap most landlords hit.

See our CGT second home and BTL property post for the full disposal mechanics and the HMRC Time to Pay guide if the cash bill arrives before the sale proceeds clear.

Allowable costs — what you can deduct

Both asset classes allow you to deduct:

• The original purchase price.
• Acquisition fees (legal, broker, survey).
• Disposal fees (estate agent, broker commission).

Residential property only:

• Stamp duty paid on acquisition (including the buy-to-let surcharge).
• Capital improvements — a new kitchen, extension or loft conversion, but not routine repairs.
• Conveyancing on both ends.

Shares only:

• Stamp duty reserve tax (0.5% on most LSE purchases).
• Section 104 pooling rules average the cost across all shares of the same class.
• Same-day and 30-day matching rules block "Bed and Breakfast" repurchases.

A capital improvement of £15,000 on a buy-to-let — say, a loft conversion — reduces the chargeable gain by £15,000 and cuts the CGT bill by £3,600 at 24%. Keep every invoice; HMRC enquiries can reach back six years.

Reliefs that change the picture

Private Residence Relief (PRR)

PRR shelters gains on your only or main home for the whole period of occupation, plus the final nine months. If you lived in a property for 7 years and let it out for 3 years before selling, then 7 + 0.75 = 7.75 years of PRR cover roughly 78% of the gain. Lettings Relief is now restricted to periods of shared occupation with a tenant.

Spouse transfers

Transfers between spouses or civil partners are at no gain / no loss. Doubling up the £3,000 annual exempt amount across both partners is the simplest CGT planning move — and either spouse's unused basic-rate band can be put to work too. A jointly held buy-to-let sold by a couple can use £6,000 of exemption.

Bed and ISA

Selling a holding outside an ISA and immediately rebuying inside an ISA (within the £20,000 annual limit) crystallises any gain — useful when you have headroom in the £3,000 allowance — and shelters all future gains and dividends. See our post on ISA bed and breakfasting CGT for the share-matching rules that make this work.

Reporting and payment timeline

For a property disposal completing 1 March 2026 the CGT must be paid by 30 April 2026, ten months before the equivalent share disposal would be due. Plan for this when timing a sale near the end of a tax year — the 60-day clock can fall mid-summer holiday.

Pooling £3,000 across the family

The annual exempt amount cannot be transferred or carried forward — but spouses each have one. A retired couple selling jointly held shares can extract £6,000 of gain CGT-free every year. Over a 10-year wind-down that is £60,000 of sheltered gain, worth up to £14,400 of saved CGT at the 24% rate.

The same logic applies to lifetime gifting before death: gains crystallise at the gift date (other than to a spouse), but the £3,000 allowance still applies and the asset leaves the donor's IHT estate after 7 years. See IHT 7-year rule and PETs for the interaction.

Common mistakes

Missing the 60-day property return. Landlords used to a 31 January habit are still caught out — the rule has been in force since April 2020 but compliance remains patchy.

Forgetting the basic-rate band sweep. If your income is well under £50,270, the 18% slice is real money. A £30,000 employee with a £20,000 share gain pays £3,060 of CGT (18% on £17,000 after the £3,000 allowance), not £4,080 at 24%.

Treating repairs as improvements. A new boiler that replaces an old one is a repair (deductible against rental income only). A first-time central heating installation is a capital improvement (deductible against CGT).

Ignoring losses. A £5,000 loss on a failed AIM holding can wipe £1,200 off a property CGT bill — but only if the loss is claimed within 4 years of the end of the tax year in which it arose.

Using the calculators

Try a £40,000 gain at £45,000 of taxable income — note how the unused basic-rate band drops the bill from £8,880 to roughly £7,200.

Sources

• HMRC: Capital Gains Tax rates and allowances
• HMRC: Report and pay your Capital Gains Tax — 60-day property return
• HMRC: HS283 Private Residence Relief
• gov.uk: Capital Gains Tax: shares and investments