How UK Capital Gains Tax works
Capital Gains Tax (CGT) is charged on the profit when you sell or dispose of an asset that has increased in value. It is the gain you make that is taxed, not the total amount of money you receive.
For individuals, the Annual Exempt Amount is 3,000 pounds for the 2025/26 and 2026/27 tax years. You only pay tax on your overall net gains above this tax-free allowance. Most trusts have an annual exempt allowance of 1,500 pounds.
Current Capital Gains Tax rates
Following changes introduced in the Autumn Budget 2024, standard asset disposals (such as shares and crypto) and residential property disposals are taxed at the same rates: 18% for basic rate taxpayers and 24% for higher or additional rate taxpayers.
Qualifying business asset disposals eligible for Business Asset Disposal Relief (BADR) are taxed at 14% in 2025/26 and 18% in 2026/27, subject to a 1,000,000 pound lifetime limit.
How your Income Tax band affects your CGT rate
Your Capital Gains Tax rate depends on your total taxable income. For the 2025/26 and 2026/27 tax years, the UK basic rate Income Tax threshold is 37,700 pounds of taxable income above your Personal Allowance.
If your taxable income plus your net taxable capital gains remains within the 37,700 pound basic rate band, your entire gain is taxed at 18%. Any portion of the gain that pushes your combined total above 37,700 pounds is taxed at the higher rate of 24%.
Worked examples from HMRC rules
Example 1 (Basic rate band): An individual has 20,000 pounds of taxable income and makes a 12,600 pound capital gain on shares. Deducting the 3,000 pound Annual Exempt Amount leaves 9,600 pounds of taxable gain. Adding 9,600 pounds to 20,000 pounds gives 29,600 pounds, which is fully within the 37,700 pound basic rate band. Tax is charged at 18%, resulting in 1,728.00 pounds Capital Gains Tax.
Example 2 (Split across basic and higher bands): An individual has 20,000 pounds of taxable income and makes a 52,600 pound capital gain. Deducting the 3,000 pound allowance leaves 49,600 pounds of taxable gain. The remaining unused basic rate band is 17,700 pounds (37,700 pounds minus 20,000 pounds). The first 17,700 pounds is taxed at 18% (3,186.00 pounds) and the remaining 31,900 pounds is taxed at 24% (7,656.00 pounds), giving a total tax of 10,842.00 pounds.
Offsetting allowable capital losses
If you sell an asset at a loss, you can register allowable losses with HMRC to offset against capital gains made in the same or future tax years. Losses are deducted from your total gains before the Annual Exempt Amount is applied.
Inputs for the capital gains tax calculator
Tax year
Select the UK tax year in which you disposed of the asset.
Asset type
Select whether the asset is standard investments (shares or crypto), residential property, or qualifying business assets.
Total capital gain
Your total profit from the sale after deducting original acquisition costs and allowable improvements.
Allowable losses
Unused capital losses from the current or previous tax years registered with HMRC to offset against your gains.
Annual taxable income
Your annual income after deducting your Personal Allowance, used to determine how much basic rate band remains.
Taxpayer status
Select individual (for the full 3,000 pound allowance) or trust (for the 1,500 pound allowance).
CALCULATOR QUESTIONS
Capital gains tax calculator questions
What is the UK Capital Gains Tax allowance for 2025/26 and 2026/27?
The UK Capital Gains Tax Annual Exempt Amount is 3,000 pounds per year for individuals and personal representatives, and 1,500 pounds for most trusts.
What are the Capital Gains Tax rates in the UK?
For standard assets (shares, crypto) and residential property, the rates are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. Qualifying business assets under BADR are taxed at 14% in 2025/26 and 18% in 2026/27.
Do I pay Capital Gains Tax when selling my main home?
In most cases you do not pay Capital Gains Tax when selling your primary residence due to Private Residence Relief (PRR), provided it was your only home throughout your ownership and has not been let out.
How do capital losses work?
Allowable capital losses can be deducted from your total gains in the same tax year. If your total losses exceed your gains, the unused losses can be carried forward indefinitely to reduce future gains, provided they are reported to HMRC within 4 years.
When do I need to report and pay Capital Gains Tax?
For UK residential property disposals with tax to pay, you must report and pay the tax within 60 days of completion using the HMRC Capital Gains Tax on UK property service. For other assets, report through Self Assessment or the HMRC real-time Capital Gains Tax service by 31 December following the end of the tax year.