Capital Gains Tax Calculator UK 2026 - Complete CGT Guide
Quick Summary
Capital Gains Tax (CGT) is charged on the profit you make when you sell or dispose of an asset that has increased in value. For 2025/26, the Annual Exempt Amount is just £3,000, with rates of 18% for basic rate taxpayers and 24% for higher rate taxpayers (unified for all assets since October 2024). This comprehensive guide explains everything you need to know about CGT rates, reliefs, property disposals, and tax-efficient strategies to minimise your bill.
Calculate Your Capital Gains Tax Now →What Is Capital Gains Tax and Who Pays It?
Capital Gains Tax is a tax on the profit (or "gain") you make when you sell, give away, or otherwise dispose of an asset that has increased in value. It is not a tax on the total amount you receive from selling something, but rather a tax on the difference between what you originally paid for the asset and what you sold it for.
CGT applies to a wide range of assets, including:
- Property: Second homes, buy-to-let properties, land, and commercial property
- Shares and investments: Stocks, unit trusts, investment funds (outside ISAs and pensions)
- Business assets: Equipment, goodwill, intellectual property
- Personal possessions: Valuables worth over £6,000 such as jewellery, art, and antiques
- Cryptocurrency: Bitcoin, Ethereum, and other digital currencies
Who Is Liable for CGT?
You may need to pay CGT if you are:
- UK resident: You pay CGT on gains from worldwide disposals
- Non-UK resident: You may still owe CGT on UK land and property disposals (since April 2015 for residential, April 2019 for all UK land and property)
- Trustees: Trusts have a reduced Annual Exempt Amount (£1,500 for 2025/26)
- Personal representatives: Executors of an estate during the administration period
Important: CGT Does Not Apply To
- Your main home (Private Residence Relief applies - see below)
- Assets held in ISAs or pensions
- UK government gilts and premium bonds
- Winnings from betting, lottery, or pools
- Personal possessions worth £6,000 or less when you sell them
- Cars (exempt even if sold at a profit)
- Assets transferred to your spouse or civil partner
Understanding whether CGT applies to your situation is the first step. Use our capital gains tax calculator to get a quick estimate of your potential tax liability.
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CGT Rates for 2025/26 and 2026/27
Capital Gains Tax rates depend on two factors: your total taxable income (which determines your income tax band) and the type of asset you are selling. Following significant changes in the Autumn Budget 2024, CGT rates on certain assets have increased.
CGT Rates for 2025/26 Tax Year (6 April 2025 - 5 April 2026)
| Asset Type | Basic Rate Taxpayer (20%) | Higher/Additional Rate (40%/45%) |
|---|---|---|
| Most assets (shares, funds, crypto, business assets) | 10% | 20% |
| Residential property (not main home) | 18% | 24% |
| Carried interest (from April 2025) | 18% | 18% |
How Your Income Tax Band Affects CGT
Your capital gain is effectively added on top of your taxable income. If your combined income and gains push you into a higher tax bracket, part of your gain may be taxed at the higher rate.
Example: Split-Rate CGT Calculation
Scenario:
- Taxable income: £45,000
- Capital gain (shares): £15,000
- Annual Exempt Amount used: £3,000
- Taxable gain: £12,000
- Basic rate band limit: £50,270
Calculation:
Remaining basic rate band: £50,270 - £45,000 = £5,270
First £5,270 of gain taxed at 10% = £527
Remaining £6,730 taxed at 20% = £1,346
Total CGT: £1,873
2026/27 Rate Changes to Watch
The UK government indicated in the Autumn Budget 2024 that CGT rates on carried interest would increase further from April 2026 to 32%. For standard assets, rates of 18%/24% for all asset types are expected to remain stable for 2026/27, though always check HMRC guidance as rates may change in future budgets. Our CGT calculator is updated as soon as new rates are confirmed.
Annual CGT Exempt Amount (Tax-Free Allowance)
Every individual receives an Annual Exempt Amount (AEA) - a tax-free allowance for capital gains each tax year. The AEA has been dramatically reduced in recent years:
| Tax Year | Individual AEA | Trust AEA |
|---|---|---|
| 2022/23 | £12,300 | £6,150 |
| 2023/24 | £6,000 | £3,000 |
| 2024/25 | £3,000 | £1,500 |
| 2025/26 | £3,000 | £1,500 |
| 2026/27 (expected) | £3,000 | £1,500 |
The dramatic reduction from £12,300 to £3,000 means many more people now face CGT bills. Previously, moderate investment gains could be covered entirely by the allowance. Now, even relatively small profits can trigger a tax liability.
Maximising Your AEA
- Use it every year: The AEA cannot be carried forward - use it or lose it
- Married couples: Transfer assets to your spouse before selling to use both allowances (£6,000 combined)
- Timing: Consider splitting disposals across tax years to use two years' AEA (£6,000 total)
- Bed and ISA: Sell and rebuy within ISA to crystallise gains within your AEA each year
Calculating CGT on Property Sales
Property disposals are the most common trigger for significant CGT bills. The rules differ depending on whether the property is residential or non-residential, and whether it has ever been your main home.
Residential Property CGT Rates
Residential property that is not your main home attracts higher CGT rates than other assets:
- Basic rate taxpayers: 18% (same rate for all assets since October 2024)
- Higher/additional rate taxpayers: 24% (compared to 20% for shares)
Worked Example: Selling a Second Home
Scenario:
- Purchased second home in 2016 for: £200,000
- Improvement costs (documented): £25,000
- Purchase costs (stamp duty, legal): £8,000
- Sold in 2026 for: £310,000
- Selling costs (estate agent, legal): £7,500
- Owner's taxable income: £55,000 (higher rate taxpayer)
CGT Calculation:
| Sale price | £310,000 |
| Less: Purchase price | -£200,000 |
| Less: Purchase costs | -£8,000 |
| Less: Improvement costs | -£25,000 |
| Less: Selling costs | -£7,500 |
| Total gain | £69,500 |
| Less: Annual Exempt Amount | -£3,000 |
| Taxable gain | £66,500 |
| CGT at 24% (higher rate, property) | £15,960 |
Non-Residential Property
Commercial property, agricultural land, and other non-residential property are taxed at the standard CGT rates (18%/24%), the same as residential property since October 2024.
Joint Ownership
When property is jointly owned by married couples or civil partners, each person's share of the gain uses their own AEA and is taxed at their individual rate. This can significantly reduce the total CGT bill.
Worked Example: Joint Ownership CGT Saving
Total gain on property: £66,500
If owned by one higher rate taxpayer:
Taxable gain: £66,500 - £3,000 = £63,500
CGT at 24% = £15,240
If owned 50/50 by couple (one higher rate, one basic rate):
Person A (higher rate): £33,250 - £3,000 = £30,250 at 24% = £7,260
Person B (basic rate): £33,250 - £3,000 = £30,250
First £5,270 at 18% = £949, remaining £24,980 at 24% = £5,995
Person B total: £6,944
Combined CGT: £14,204 (saving of £1,036)
Calculate your specific property CGT with our capital gains tax calculator and check stamp duty costs on your next purchase with our stamp duty calculator.
CGT on Shares and Investments
Shares and investments held outside tax-efficient wrappers (ISAs, pensions) are subject to CGT when sold at a profit. The rules include some specific provisions that investors need to understand.
Basic Share CGT Calculation
Worked Example: Selling Shares
Scenario:
- Purchased 5,000 shares at £2.00 each in 2019: £10,000
- Dealing costs on purchase: £12
- Sold all shares at £4.50 each in 2026: £22,500
- Dealing costs on sale: £12
- Investor is a basic rate taxpayer
Calculation:
| Sale proceeds | £22,500 |
| Less: Purchase cost | -£10,000 |
| Less: Dealing costs | -£24 |
| Total gain | £12,476 |
| Less: AEA | -£3,000 |
| Taxable gain | £9,476 |
| CGT at 18% (basic rate) | £1,705.68 |
Share Identification Rules
When you buy the same shares at different times and prices, HMRC uses specific rules to determine which shares you sold:
- Same-day rule: Shares bought on the same day as the sale are matched first
- Bed and breakfast rule (30-day rule): Shares bought within 30 days after the sale are matched next
- Section 104 pool: All remaining shares are averaged into a single "pool" with an average cost per share
The 30-Day Rule
If you sell shares and repurchase the same shares within 30 days, HMRC matches the sale to the repurchase. This prevents "bed and breakfasting" - selling to crystallise a gain within your AEA and immediately rebuying. To avoid this rule, wait at least 31 days before repurchasing, or rebuy inside an ISA (Bed and ISA strategy).
Employee Share Schemes
If you received shares through an employer scheme (EMI, CSOP, SIP, SAYE), special rules may apply. In many cases, CGT is only due on gains above the market value at the date the option was exercised. Some schemes, such as Enterprise Management Incentive (EMI) options, may qualify for Business Asset Disposal Relief at a reduced 10% rate.
Private Residence Relief Explained
Private Residence Relief (PRR) is the most valuable CGT relief available to UK taxpayers. It exempts the gain on your main home from CGT entirely, provided certain conditions are met.
Qualifying Conditions
- The property has been your only or main residence throughout your period of ownership
- The grounds are no more than 0.5 hectares (including the building)
- You have not used any part of the property exclusively for business
Partial Relief
If you have not lived in the property for the entire ownership period, you receive partial PRR based on the time you occupied it. Importantly, the final 9 months of ownership always qualify for PRR, even if you are not living there (this applies if you have lived in the property as your main home at some point).
Worked Example: Partial Private Residence Relief
Scenario:
- Owned property for 120 months (10 years)
- Lived in it as main home for 72 months (6 years)
- Rented it out for 48 months (4 years)
- Total gain: £100,000
PRR Calculation:
Qualifying months: 72 (lived in) + 9 (final period relief) = 81 months
PRR fraction: 81/120 = 67.5%
Gain exempt under PRR: £100,000 x 67.5% = £67,500
Remaining gain: £32,500
Less AEA: -£3,000
Taxable gain: £29,500
Periods of Deemed Occupation
Certain absences from your property can still count as occupation for PRR purposes:
- Up to 3 years: Any absence for any reason
- Up to 4 years: Working elsewhere in the UK (required by employer)
- Any length: Working abroad (required by employer)
These deemed occupation periods only apply if you lived in the property before and after the absence (or could not return due to the terms of employment).
Lettings Relief for Landlords
Lettings Relief has been significantly reduced since April 2020. It now only applies where you share occupation of the property with a tenant - for example, if you let out a spare room while still living in the property as your main home.
Current Lettings Relief Rules (2025/26)
- Available only if you live in the property at the same time as a tenant
- Maximum relief: the lowest of the gain attributable to the letting, the PRR amount, or £40,000
- Does not apply to properties that were fully let while you lived elsewhere
Lettings Relief - Before and After April 2020
Before April 2020: Lettings Relief applied whenever a property had been both your main home and let out at different times. This benefited many landlords who had previously lived in their rental properties.
From April 2020: You must share occupation with the tenant to claim Lettings Relief. This effectively eliminated the relief for most buy-to-let landlords who moved out before letting.
If you are a landlord selling a property that was once your main home, use our buy-to-let calculator alongside the CGT calculator to understand your full financial position.
How to Report and Pay CGT to HMRC
The reporting and payment process for CGT depends on the type of asset you have disposed of.
Residential Property: The 60-Day Rule
Since April 2020, UK residents who dispose of residential property that is subject to CGT must:
- Report the disposal to HMRC within 60 days of the completion date
- Pay an estimate of the CGT due within the same 60-day window
- Use HMRC's "Report and pay Capital Gains Tax on UK property" online service
Late Reporting Penalties
Failure to report within 60 days can result in penalties:
- Up to 30 days late: Initial penalty of £100
- Up to 6 months late: Further penalty of £300 or 5% of the tax due (whichever is greater)
- Up to 12 months late: Further penalty of £300 or 5% of tax due (whichever is greater)
- Interest also accrues on late payments from the 60-day deadline
Other Assets: Self Assessment
For non-property CGT (shares, investments, crypto, personal possessions), you report gains through your Self Assessment tax return. The key dates are:
- 5 April: End of tax year
- 31 October: Paper return deadline
- 31 January: Online return and payment deadline (following year)
Do You Need to Report Small Gains?
You do not need to report gains if your total proceeds from all disposals in the tax year are less than four times the AEA (£12,000 for 2025/26) AND the gains are fully covered by the AEA. However, if you need to claim losses, you must report them within four years.
Tax-Efficient Strategies to Minimise CGT
There are several legitimate strategies to reduce or eliminate your CGT bill. Strategic planning can make a significant difference, especially given the reduced Annual Exempt Amount.
1. ISAs (Individual Savings Accounts)
ISA Wrapper Protection
All gains within ISAs are completely free from CGT. For 2025/26, you can invest up to £20,000 per year in ISAs. Over time, building a substantial ISA portfolio means you may never need to pay CGT on investment gains. Types of ISA include Stocks and Shares ISA, Cash ISA, Innovative Finance ISA, and Lifetime ISA.
2. Bed and ISA Strategy
This is one of the most effective CGT planning strategies:
- Sell investments held outside an ISA, crystallising gains within your AEA (£3,000)
- Immediately repurchase the same investments inside your ISA
- All future growth is then sheltered from CGT
Bed and ISA Example
Year 1: Sell shares with £3,000 gain (covered by AEA, so £0 CGT). Rebuy same shares inside ISA.
Year 2: Repeat with another £3,000 of gains.
Over 5 years: You move £15,000 of gains into tax-free ISA protection at zero CGT cost.
Without this strategy, selling all at once would create a £12,000 taxable gain (after AEA), costing up to £2,880 at 24% for a higher rate taxpayer.
3. Pension Contributions
While pension contributions do not directly reduce CGT, they can reduce your income tax band. If a pension contribution pushes you from higher rate to basic rate, your CGT rate drops from 24% to 18%. This indirect strategy can save thousands.
4. Spouse/Civil Partner Transfers
- Transfers between spouses are CGT-free
- Transfer an asset to your spouse who has unused AEA or is a basic rate taxpayer
- They sell the asset at their lower tax rate
- Potential saving: up to 6% on gains (24% vs 18% if spouse has no other income)
5. Capital Losses
Offset current year losses against gains first. Carry forward unused losses to future years. Consider "harvesting" losses - selling underperforming investments before the tax year end to offset against gains elsewhere.
6. Business Asset Disposal Relief (formerly Entrepreneurs' Relief)
Reduced Rate for Business Owners
If you are selling all or part of a qualifying business, you may pay CGT at just 14% on up to £1 million of lifetime gains (rising to 18% from April 2026). This applies to sole traders, business partners, and company shareholders meeting specific conditions (at least 5% shareholding, 2 years as an officer/employee). The lifetime limit was reduced from £10 million to £1 million in March 2020.
7. Investors' Relief
A 10% CGT rate applies on qualifying gains up to £10 million from shares in unlisted trading companies, provided the shares were newly issued, held for at least 3 years, and the investor is not an employee or officer of the company.
Plan your disposals using our capital gains tax calculator and model the impact of different strategies.
Worked Examples: Common CGT Scenarios
Example 1: Selling a Buy-to-Let Property
Buy-to-Let CGT Calculation
Scenario:
- Purchased buy-to-let flat in 2018 for £180,000
- Total allowable costs (stamp duty, legal, improvements): £18,500
- Sold in 2026 for £245,000
- Selling costs: £5,500
- Never lived in the property
- Owner is a higher rate taxpayer (£60,000 salary)
| Sale price | £245,000 |
| Less: Purchase price + allowable costs | -£198,500 |
| Less: Selling costs | -£5,500 |
| Total gain | £41,000 |
| Less: AEA | -£3,000 |
| Taxable gain | £38,000 |
| CGT at 24% (residential property, higher rate) | £9,120 |
Key point: This CGT must be reported and paid within 60 days of the sale completion date.
Example 2: Selling Shares (Portfolio Disposal)
Multiple Share Sales in One Tax Year
Scenario:
- Sale 1: Tech shares - gain of £8,000
- Sale 2: Bank shares - loss of £2,500
- Sale 3: Fund units - gain of £4,200
- Investor is a basic rate taxpayer
| Total gains | £12,200 |
| Less: Losses | -£2,500 |
| Net gains | £9,700 |
| Less: AEA | -£3,000 |
| Taxable gain | £6,700 |
| CGT at 18% (basic rate) | £1,206 |
Example 3: Joint Ownership Property Sale
Married Couple Selling a Holiday Home
Scenario:
- Holiday cottage owned 50/50 by married couple
- Total gain on sale: £80,000
- Husband: higher rate taxpayer (40%)
- Wife: basic rate taxpayer (20%), with £8,000 remaining in basic rate band
Husband's CGT:
| His share of gain | £40,000 |
| Less: AEA | -£3,000 |
| Taxable gain at 24% | £37,000 |
| His CGT | £8,880 |
Wife's CGT:
| Her share of gain | £40,000 |
| Less: AEA | -£3,000 |
| Taxable gain | £37,000 |
| First £8,000 at 18% (within basic rate band) | £1,440 |
| Remaining £29,000 at 24% | £6,960 |
| Her CGT | £8,400 |
Total CGT for couple: £17,280
If owned solely by husband: £18,480
Saving from joint ownership: £1,200
Frequently Asked Questions
How much Capital Gains Tax will I pay in 2025/26?
The amount of CGT you pay depends on your income tax band and the type of asset. For 2025/26, basic rate taxpayers pay 18% on all assets, while higher/additional rate taxpayers pay 24% on all assets. The first £3,000 of gains is tax-free under the Annual Exempt Amount.
What is the CGT Annual Exempt Amount for 2025/26?
The CGT Annual Exempt Amount for 2025/26 is £3,000 per individual (£1,500 for trusts). This is a significant reduction from £12,300 in 2022/23. Married couples and civil partners each have their own £3,000 allowance, providing a combined £6,000 of tax-free gains.
Do I pay Capital Gains Tax when I sell my home?
If the property is your only or main home, Private Residence Relief means you generally pay no CGT. However, partial CGT may be due if you have been absent for extended periods, used part of the property exclusively for business, or have grounds exceeding 0.5 hectares. Second homes and buy-to-let properties do not qualify for full PRR.
How long do I have to report and pay CGT on property?
Since April 2020, UK residents must report and pay CGT on residential property disposals within 60 days of the completion date using HMRC's online service. Late reporting attracts penalties starting at £100. For non-property assets, you report through Self Assessment by 31 January following the end of the tax year.
Can I offset losses against Capital Gains Tax?
Yes, capital losses can be offset against capital gains in the same tax year. Unused losses can be carried forward indefinitely. You must register losses with HMRC within four years of the end of the tax year in which the loss occurred. Losses must be used against gains in the current year before any brought-forward losses are applied.
Is CGT payable on inherited property?
No CGT is payable when you inherit property - the estate may pay Inheritance Tax instead. However, if you sell inherited property, CGT is calculated on the gain from the probate value (market value at the date of death) to the sale price. Use our inheritance tax calculator to understand estate tax liabilities.
What is Bed and ISA and how does it reduce CGT?
Bed and ISA is a tax-planning strategy where you sell investments to crystallise gains within your Annual Exempt Amount (paying no CGT), then immediately repurchase the same investments inside an ISA. All future growth within the ISA is then completely free from CGT and income tax. This is one of the most effective long-term tax-reduction strategies available to UK investors.
Does Capital Gains Tax apply to cryptocurrency?
Yes, HMRC treats cryptocurrency as a taxable asset. You pay CGT when you sell crypto for fiat currency, exchange one crypto for another, or use crypto to pay for goods and services. The same rates apply as for shares (18%/24%), and the same AEA can be used. Each transaction is a separate disposal for CGT purposes.
Related Calculators and Resources
Calculate Your Tax Position
- Use our Capital Gains Tax Calculator to calculate your exact CGT liability
- Check stamp duty on property purchases with our Stamp Duty Calculator
- Model buy-to-let returns with our Buy-to-Let Calculator
- Plan inheritance with our Inheritance Tax Calculator
- Calculate dividend tax with our Dividend Tax Calculator
Free CGT Resources
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James Mitchell, ACCA
Chartered Accountant & Former HMRC Advisor
James is a Chartered Certified Accountant (ACCA) specialising in UK personal taxation and financial planning. With over 12 years in practice and a background as a former HMRC compliance officer, he brings authoritative insight to complex tax topics.