Tax Guide · 2025/26
Capital Gains Tax UK: Complete 2025/26 Guide
Capital Gains Tax (CGT) is charged when you sell or give away an asset that has increased in value — investment property, shares (outside an ISA), business interests, art, jewellery, crypto. The October 2024 Budget significantly changed the rates and equalised CGT on property with other assets. This guide covers all the rules for 2025/26.
What is CGT?
Capital Gains Tax is paid on the profit (“gain”) when you dispose of an asset for more than you paid for it. “Dispose” includes selling, gifting, swapping or receiving compensation. The gain is the proceeds minus the original cost minus allowable costs (legal fees, improvements, acquisition costs).
CGT only applies above the annual exempt amount (£3,000 for 2025/26)[gov.uk]. Many assets are also completely exempt: your main home, ISAs, pensions, premium bonds, personal possessions worth under £6,000, betting winnings.
CGT Rates 2025/26 (post-October 2024 Budget[gov.uk])
| Disposal type | Basic rate | Higher/Additional rate |
|---|---|---|
| Residential property (not main home) | 18% | 24% |
| Shares (non-ISA) | 18% | 24% |
| Other assets (art, business, etc.) | 18% | 24% |
| BADR (qualifying business) | 14% (rises to 18% in April 2026, then 24% from April 2027) | |
| Carried interest | 32% | |
Major change October 2024: CGT on non-residential assets jumped from 10%/20% to 18%/24% (immediate effect 30 October 2024). Residential property rates were unchanged. Carried interest moves to a single 32% rate from April 2025.
How to Calculate Your CGT
- Work out the gain: sale price − original cost − allowable costs (legal fees, improvements)
- Subtract any losses from the same tax year
- Subtract the annual exempt amount (£3,000)
- Add the taxable gain to your other income to determine the rate
- Apply 18% to the portion within your basic rate band, 24% to the rest
Example: Higher-rate taxpayer sells a buy-to-let for £350,000 (bought for £280,000, £8,000 in costs). Gain = £350,000 − £280,000 − £8,000 = £62,000. Less £3,000 allowance = £59,000 taxable. CGT at 24% = £14,160.
CGT on Property
CGT on residential property is a major source of UK tax revenue. Common scenarios:
- Buy-to-let sale: always CGT-liable unless held in a pension/SIPP
- Second home: if not your main residence under PRR election
- Inherited property sold: gain calculated from probate value, not original cost
- Gifted property: deemed disposal at market value (might trigger CGT)
- Main home with garden over 0.5 hectares: excess may be taxable
Property CGT must be reported and paid within 60 daysof completion using HMRC's specific online service. This is much shorter than the Self Assessment deadline for other gains.
CGT on Shares
Shares held outside an ISA or pension are CGT-liable. Key rules:
- Section 104 holding: shares of the same class are pooled with average cost
- Same-day rule: shares bought and sold on the same day matched together
- Bed & Breakfasting: 30-day rule prevents you selling and re-buying for tax purposes
- Bed & ISA: sell shares, immediately re-buy inside an ISA — uses CGT allowance, future returns tax-free
- Bed & SIPP: similar to Bed & ISA but into pension
Exemptions and Reliefs
- Private Residence Relief (PRR) — your main home is exempt
- Annual Exempt Amount — £3,000 per person
- Business Asset Disposal Relief (BADR) — £1m lifetime limit at 14%
- Investors\' Relief — unlisted shares, 14% on first £1m
- Rollover Relief — defer CGT by reinvesting in business assets
- Gift Hold-Over Relief — defer CGT on certain business gifts
- Spouse/civil partner transfers — completely exempt
- Charity gifts — exempt
- EIS / SEIS disposals — exempt if shares held 3+ years
- Letting Relief — limited to shared occupancy with tenant