Calculate your UK Capital Gains Tax liability for 2025/26
CGT Rates 2025/26:
Note: This calculator provides estimates only. CGT rules are complex and professional advice should be sought for significant transactions.
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Capital Gains Tax (CGT) is charged on the profit when you sell (or 'dispose of') an asset that has increased in value. Understanding CGT is essential for anyone selling property, shares, business assets, or valuable possessions in the UK.
Scenario: Sarah bought a buy-to-let flat in 2015 for £180,000. She sells it in 2024 for £280,000.
Income: £35,000/year (basic rate taxpayer)
| Sale price | £280,000 |
| Original purchase price | -£180,000 |
| Selling costs (estate agent, solicitor) | -£8,000 |
| Total capital gain | £92,000 |
| Annual CGT exemption 2025/26 | -£3,000 |
| Taxable gain | £89,000 |
| CGT due at 18% (property, basic rate) | £16,020 |
💡 Planning tip: If Sarah had transferred half the property to her spouse before selling, they could have used both £3,000 allowances, saving £540 (18% of £3,000)!
Scenario: Tom bought shares in various companies for £50,000 in 2020. He sells them in 2024 for £75,000.
Income: £65,000/year (higher rate taxpayer)
| Sale proceeds | £75,000 |
| Original purchase cost | -£50,000 |
| Stockbroker fees & stamp duty | -£500 |
| Total capital gain | £24,500 |
| Annual CGT exemption | -£3,000 |
| Taxable gain | £21,500 |
| CGT due at 20% (shares, higher rate) | £4,300 |
💡 ISA Advantage: If Tom had held these shares in a Stocks & Shares ISA instead, the £24,500 gain would have been completely tax-free, saving £4,300!
Scenario: Emma bought Bitcoin for £5,000 in 2022. She sells it in 2024 for £15,000.
Income: £30,000/year (basic rate taxpayer)
| Sale proceeds | £15,000 |
| Original purchase cost | -£5,000 |
| Exchange fees (buying + selling) | -£200 |
| Total capital gain | £9,800 |
| Annual CGT exemption | -£3,000 |
| Taxable gain | £6,800 |
| CGT due at 10% (crypto, basic rate) | £680 |
⚠️ Crypto Warning: HMRC requires reporting of all crypto disposals (including swapping one coin for another, not just selling for pounds). Keep detailed records!
Legal tax planning can significantly reduce your CGT liability. Here are proven strategies used by UK investors to minimize capital gains tax:
How it works: Transfers between married couples/civil partners are CGT-free. Transfer assets before selling to use both £3,000 allowances.
Example: £10K gain → Transfer 50% to spouse → Use both £3,000 allowances = £6,000 tax-free vs £3,000
Tax saving: Up to £600/year (20% of £3,000 extra allowance)
💡 Pro tip: If one spouse is basic rate and other is higher rate, transfer to basic rate spouse to benefit from lower CGT rates too!
How it works: Split large sales across tax years to use the annual exemption twice.
Example: £20K gain → Sell £10K before April 5, £10K after April 6 = use £6,000 allowances vs £3,000
Tax saving: £600 (20% of £3,000 extra allowance)
💡 Pro tip: UK tax year runs April 6 - April 5. Plan sales around these dates for maximum efficiency!
How it works: Capital losses reduce your taxable gains. Losses can be carried forward indefinitely.
Example: £15K gain + £5K loss = £10K taxable gain (after £3K allowance = £7K × 20% = £1,400 CGT vs £2,400)
Tax saving: £1,000 in this example
💡 Pro tip: Report losses to HMRC within 4 years even if unused. They can offset future gains indefinitely!
How it works: Your main home is CGT-free. Final 9 months always qualifies even if rented out.
Example: Owned property 10 years. Lived in 7 years, rented 3 years → 7.75/10 years qualify (7 years + final 9 months)
Tax saving: 77.5% of gain is tax-free!
💡 Pro tip: Lettings Relief (£40K max) available if you rented out part of your main home while living there!
How it works: All gains within ISAs are completely tax-free. £20,000/year allowance (£40K per couple).
Example: £20K in shares grows to £50K over 10 years = £30K gain, 100% tax-free (save £6,000 at 20% CGT)
Tax saving: Unlimited! All future gains are tax-free
💡 Pro tip: Transfer existing shares "in specie" to ISA to avoid selling them. Use annual ISA allowance first!
How it works: Sell & rebuy assets annually to "lock in" gains below £3,000 exemption, resetting your cost base.
Example: Shares worth £23K (£20K cost) → Sell & rebuy in same day → New cost base £23K → Future growth only taxed from £23K not £20K
Tax saving: £600/year (20% of £3,000) if you use exemption every year
💡 Pro tip: Bed & ISA strategy: Sell shares using £3K allowance, immediately rebuy within ISA for permanent tax-free status!
🎯 Combined Strategy Savings
Couple using spouse allowances + timing + ISAs could save £5,000+ per year in CGT on investment gains!
Avoid these costly errors that trap UK investors every year. Simple mistakes can lead to overpaying CGT, penalties, or missed opportunities.
💸 Cost: £600/year lost (20% of £3,000 wasted allowance)
The mistake: Selling assets individually instead of transferring to spouse first to use both £3,000 allowances.
Example: £10K gain, sell alone = pay CGT on £7K. Transfer half to spouse first = both use £3K allowances, only pay CGT on £4K!
✅ Fix: Transfer assets to spouse before selling (CGT-free transfer). Both claim £3,000 exemption = £6,000 total tax-free!
💸 Cost: £100+ penalties + daily interest charges
The mistake: Missing the 60-day deadline for UK residential property disposals.
Reality: HMRC requires CGT property return + payment within 60 days of completion, even if no tax due (using exemption).
✅ Fix: Use HMRC's online "Report and pay your Capital Gains Tax on UK property" service immediately after completion. Set completion date reminder!
💸 Cost: £2,000-£10,000+ (varies by transaction size)
The mistake: Not deducting legitimate costs from capital gain: purchase costs, improvement costs, selling costs.
Deductible: Stamp duty, solicitor fees, estate agent fees, surveyors, structural improvements (not repairs), stockbroker fees
✅ Fix: Keep all receipts! £10K in deductible costs on a £100K property gain = £2,000 tax saving (20% CGT)!
💸 Cost: £500-£5,000+ lost future tax savings
The mistake: Not reporting capital losses to HMRC within 4 years, losing ability to offset future gains.
Example: £10K crypto loss in 2024 not reported → 2026 £20K stock gain = pay CGT on £17K. If reported, offset loss = pay CGT on only £7K!
✅ Fix: Report all losses via Self Assessment even if no gains that year. Losses carry forward forever once registered!
💸 Cost: Thousands in unnecessary CGT over lifetime
The mistake: Investing in shares/funds outside ISA wrapper when £20K/year allowance available.
Example: £20K in shares (outside ISA) grows to £80K over 20 years = £60K gain, £12K CGT. Same in ISA = £0 CGT!
✅ Fix: Always max out ISA allowance first (£20K/year). Transfer existing shares "in specie" to ISA to avoid selling!
💸 Cost: £500-£3,000+ in incorrect CGT calculations
The mistake: Not knowing shares sold and bought within 30 days use the new purchase price for CGT, not original cost.
The rules: Same-day sales/purchases matched first, then 30-day acquisitions, then oldest shares (Section 104 pool).
✅ Fix: Wait 31 days before rebuying sold shares to avoid 30-day rule. Or use Bed & ISA (sell, rebuy in ISA) to avoid rule!
💸 Cost: HMRC penalties + tax based on guesswork instead of actuals
The mistake: No records of purchase dates, costs, and selling costs. HMRC can reject claims without evidence.
Required records: Contract notes, invoices, receipts, crypto exchange records, improvement costs, all buying/selling costs
✅ Fix: Keep ALL records for 6 years after disposal. Use digital folders or spreadsheets. For crypto, export exchange history annually!
⚠️ Total Potential CGT Overpayment from Mistakes
£5,000 - £20,000+
Over a lifetime of investing! Don't throw money away - plan your CGT properly.
Always verify CGT information with official HMRC sources. Here are the authoritative resources for UK Capital Gains Tax:
Website: gov.uk/capital-gains-tax
Official CGT guidance, rates, allowances, reporting requirements
Helpline: 0300 200 3300 (Mon-Fri 8am-6pm)
Website: Report & pay CGT on property (60-day deadline)
Online service for reporting residential property disposals
Website: Current CGT rates for 2025/26
Annual exemption: £3,000 | Property: 18%/28% | Shares: 10%/20%
Website: Tax when you sell your home
Main home relief, lettings relief, final 9-month relief
Chartered Accountants: Find ICAEW or ACCA qualified accountants for CGT planning
Tax Advisors: Chartered Institute of Taxation (CIOT) members specialize in CGT
MoneyHelper: Free, impartial guidance - moneyhelper.org.uk
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These HMRC-approved CGT strategies are completely legal and can save UK taxpayers thousands of pounds on property, shares, and investment sales. Updated for 2025/26 tax year with real UK examples and exact savings calculations.
How it works: Every UK taxpayer gets £3,000 Capital Gains Tax annual exemption (2025/26). First £3,000 of total gains in tax year = 0% CGT. Unused allowance CANNOT carry forward to next year (use it or lose it!). Strategic selling = maximize tax-free gains every year. Real UK example (2025/26): Sarah owns shares portfolio worth £50,000 (bought for £30,000, unrealized gain £20,000). Wants to sell all shares. Strategy A - Sell all in one go (April 2025): Gain: £20,000. Annual exemption: £3,000. Taxable gain: £20,000 - £3,000 = £17,000. Sarah is higher rate taxpayer (40% income tax band). CGT on shares: 20% for higher rate. Tax: £17,000 × 20% = £3,400 CGT bill. Strategy B - Spread over 3 tax years: Year 1 (2025/26): Sell £16,500 shares (gain £6,600). Use £3,000 exemption. Taxable: £3,600. CGT: £3,600 × 20% = £720. Year 2 (2025/26): Sell £16,500 shares (gain £6,600). Use £3,000 exemption. Taxable: £3,600. CGT: £3,600 × 20% = £720. Year 3 (2026/27): Sell £17,000 shares (gain £6,800). Use £3,000 exemption. Taxable: £3,800. CGT: £3,800 × 20% = £760. Total CGT: £720 + £720 + £760 = £2,200. Tax saved: £3,400 - £2,200 = £1,200! Plus Sarah uses 3 × £3,000 exemptions = £9,000 tax-free (vs only £3,000 if sold all at once). Extra saving: £9,000 - £3,000 = £6,000 × 20% = £1,200 benefit from extra exemptions.
How it works: "Bed & ISA" = sell shares (trigger CGT on gain), immediately rebuy same shares inside ISA. Pay CGT once now (on current gain), but all future growth is CGT-free forever inside ISA. Works best when gain is small or within £3,000 annual exemption. ISA allowance £20,000/year (2025/26). Real UK example (2025/26): Mark owns £18,000 Apple shares outside ISA (bought for £15,000, gain £3,000). Shares expected to grow to £50,000 over 10 years. Without Bed & ISA (hold shares outside ISA): 10 years later: Shares worth £50,000. Total gain: £50,000 - £15,000 = £35,000. Annual exemption: £3,000. Taxable gain: £32,000. CGT (20% higher rate): £32,000 × 20% = £6,400 tax bill in 10 years. With Bed & ISA (now, 2025): Sell shares: Gain £3,000 (original purchase £15,000 → current value £18,000). Use annual exemption £3,000. CGT: £0 (covered by exemption!). Immediately rebuy £18,000 Apple shares inside ISA. 10 years later: Shares worth £50,000 inside ISA. Gain: £50,000 - £18,000 = £32,000. CGT: £0 (ISAs exempt from CGT forever!). Tax saved: £6,400 - £0 = £6,400! How to execute: Day 1: Sell shares in regular account (£18,000 proceeds). Day 1: Transfer £18,000 to Stocks & Shares ISA. Day 1-2: Buy same shares inside ISA. No need to wait (old 30-day rule removed). Cost: £0 if gain within £3,000 exemption. Benefit: All future growth CGT-free!
How it works: Transfers of assets between married couples/civil partners = NO CGT charge (exempt). Recipient spouse inherits original purchase price (acquisition cost). Both spouses get separate £3,000 annual exemptions = £6,000 total per couple. Strategy: Transfer half to spouse, both sell same year = use both exemptions. Real UK example (2025/26): David owns buy-to-let property, sells for £250,000 (bought £200,000, gain £50,000). David alone would pay: Gain £50,000. Exemption £3,000. Taxable £47,000. CGT 28% (higher rate, property): £47,000 × 28% = £13,160 tax. Strategy with spouse transfer: Before sale: David transfers 50% property ownership to wife Emma (CGT-exempt transfer). Both now own 50% each. Emma inherits David's original acquisition cost (£100,000 for her 50% share). Sale proceeds: David receives £125,000 (50% of £250,000). Emma receives £125,000 (50% of £250,000). David's CGT: Sale: £125,000. Cost: £100,000 (50% of original £200,000). Gain: £25,000. Exemption: £3,000. Taxable: £22,000. Tax: £22,000 × 28% = £6,160. Emma's CGT: Sale: £125,000. Cost: £100,000 (inherited from David). Gain: £25,000. Exemption: £3,000. Taxable: £22,000. Tax: £22,000 × 28% = £6,160. Total tax: £6,160 + £6,160 = £12,320. Tax saved: £13,160 - £12,320 = £840 (saved by using Emma's £3,000 exemption). Even better if Emma is basic rate taxpayer: If Emma earns under £50,270, her CGT rate on property is 18% (not 28%). Emma's tax: £22,000 × 18% = £3,960 (vs £6,160). Total tax: £6,160 + £3,960 = £10,120. Tax saved: £13,160 - £10,120 = £3,040!
How it works: UK tax year: 6 April to 5 April. Sell assets strategically either side of 5 April midnight = access TWO annual exemptions (current year £3,000 + next year £3,000 = £6,000 total tax-free). Perfect for large share portfolios or multiple properties. Real UK example (2025/26): Lisa selling investment property for £180,000 (bought £150,000, gain £30,000). Higher rate taxpayer. Option A - Sell all 5 April 2025: Gain: £30,000. Exemption: £3,000 (2025/26). Taxable: £27,000. CGT 28%: £27,000 × 28% = £7,560 tax. Option B - Split completion dates: Uses property completion dates (not exchange contracts). March 2025: Sell 50% share to Buyer A for £90,000. Completion 30 March 2025 (2025/26 tax year). Gain: £15,000 (50% of £30,000). Exemption: £3,000 (2025/26). Taxable: £12,000. Tax: £12,000 × 28% = £3,360. April 2025: Sell remaining 50% to Buyer B for £90,000. Completion 10 April 2025 (2025/26 tax year). Gain: £15,000. Exemption: £3,000 (2025/26). Taxable: £12,000. Tax: £12,000 × 28% = £3,360. Total tax: £3,360 + £3,360 = £6,720. Tax saved: £7,560 - £6,720 = £840! Even easier with shares: Shares = completion instant. Sell half portfolio 5 April, other half 6 April (next day!). Uses 2 exemptions immediately. Shares example: Tom sells £100,000 shares (gain £30,000). 5 April 2025: Sell £50,000 worth (gain £15,000). Use £3,000 exemption (2025/26). Taxable £12,000. Tax: £12,000 × 20% = £2,400. 6 April 2025: Sell £50,000 worth (gain £15,000). Use £3,000 exemption (2025/26). Taxable £12,000. Tax: £12,000 × 20% = £2,400. Total: £4,800 vs £5,400 if sold all 5 April. Saved: £600!
How it works: Capital losses offset against capital gains (same tax year or carried forward). Must deduct losses BEFORE applying £3,000 annual exemption. Losses carried forward indefinitely until used. Must report losses to HMRC within 4 years even if no gains that year. Shares losses only offset shares gains; property losses offset any gains. Real UK example (2025/26): Rachel sells rental property: gain £40,000. Also owns shares in failed startup: loss £12,000. Higher rate taxpayer. Without offsetting loss (ignores shares): Property gain: £40,000. Annual exemption: £3,000. Taxable: £37,000. CGT 28%: £37,000 × 28% = £10,360 tax. With offsetting loss: Property gain: £40,000. Shares loss: -£12,000. Net gain: £40,000 - £12,000 = £28,000. Annual exemption: £3,000. Taxable: £25,000. CGT 28%: £25,000 × 28% = £7,000. Tax saved: £10,360 - £7,000 = £3,360! Strategy to create losses: January 2026: Check portfolio for underperforming shares down 20-50%. Sell loss-making shares to crystalize loss (can rebuy same shares after 30 days to avoid "bed & breakfast" anti-avoidance rule). Use loss to offset gains from profitable investments sold same year. Advanced example - loss carried forward: 2023/24: James sells shares, loss £20,000. No gains that year. Reports loss to HMRC (must report within 4 years). 2025/26: James sells property, gain £50,000. Uses carried-forward loss: Gain: £50,000. Loss from 2023/24: -£20,000. Net gain: £30,000. Exemption: £3,000. Taxable: £27,000. CGT 28%: £27,000 × 28% = £7,560. Without loss offset: Taxable: £47,000 (£50,000 - £3,000). Tax: £47,000 × 28% = £13,160. Saved: £13,160 - £7,560 = £5,600 by carrying forward loss from previous year!
How it works: Sale of your main home = 0% CGT (Principal Private Residence Relief, PPR). Entire gain exempt if lived there whole ownership period. If partially rented out or had second home, relief prorated by occupation period. PLUS final 9 months ALWAYS exempt (even if you moved out/rented it). Lettings Relief removed 2020 (only applies if owner still living there). Real UK example (2025/26): Mohammed owned house 10 years (120 months), sells for £400,000 gain. Lived there: 8 years (96 months). Rented out: 2 years (24 months). Moved out final year but kept ownership. PPR calculation: Total ownership: 120 months. Lived there: 96 months (exempt). Final 9 months: ALWAYS exempt (even though rented out). Total exempt: 96 + 9 = 105 months. Taxable period: 120 - 105 = 15 months. Gain allocation: Exempt gain: £400,000 × (105 ÷ 120) = £350,000. Taxable gain: £400,000 × (15 ÷ 120) = £50,000. CGT on taxable portion: Taxable: £50,000. Exemption: £3,000. Taxable: £47,000. CGT 28% (property, higher rate): £47,000 × 28% = £13,160 tax. If Mohammed hadn't claimed final 9 months: Exempt: 96 months only. Taxable: 24 months. Taxable gain: £400,000 × (24 ÷ 120) = £80,000. Tax: (£80,000 - £3,000) × 28% = £21,560. Saved by final 9-month relief: £21,560 - £13,160 = £8,400! Nomination strategy for 2 homes: If you own 2 properties (e.g., flat + house), nominate which is "main residence" to HMRC within 2 years of acquiring second property. Can switch nomination every 2 years. Sell whichever has highest gain while it's nominated as main residence = 0% CGT!
How it works: Business Asset Disposal Relief (formerly Entrepreneurs' Relief) = 10% flat CGT rate on qualifying business disposals (vs 20% normal rate on shares). Lifetime limit £1 million gains (raised from £500K in 2020). Qualifying: Sell business you owned 2+ years, 5%+ shareholding in trading company you worked for 2+ years, business assets after business closure. Real UK example (2025/26): Fatima sells her limited company (IT consultancy) she owned 5 years. Sale price £1.2 million (bought for £50,000 share capital, gain £1,150,000). Without BADR: Gain: £1,150,000. Annual exemption: £3,000. Taxable: £1,147,000. CGT 20% (shares, higher rate): £1,147,000 × 20% = £229,400 tax. With BADR: Fatima claims BADR (she owned 100% for 5+ years, worked in company, trading company). BADR limit: £1 million (lifetime allowance). Gain on first £1 million: 10% rate. Gain above £1 million: 20% normal rate. Tax calculation: £1,000,000 × 10% = £100,000 (BADR rate). £150,000 × 20% = £30,000 (normal rate, exceeds £1m limit). Less annual exemption: -£3,000 × 20% = -£600. Total CGT: £100,000 + £30,000 - £600 = £129,400. Tax saved: £229,400 - £129,400 = £100,000! Qualifying conditions (must meet ALL): 1. Owned business/shares at least 2 years before disposal. 2. Trading company (not investment/property holding company). 3. If shares: owned 5%+ shares + worked as employee/director. 4. If sole trader: disposed of whole business or part after closure. 5. Claim BADR on Self Assessment tax return (deadline same as return, 31 Jan). Lifetime allowance: £1 million total across all claims. Once used, cannot claim more. Track cumulative BADR claims to avoid exceeding. Example tracking: 2020: Sold business A, gain £300K, claimed BADR. 2025: Selling business B, gain £1.15M. BADR remaining: £1m - £300K = £700K. Can claim BADR on £700K at 10%. Remaining £450K taxed at 20%.
These common CGT mistakes cost UK taxpayers millions annually. Learn from real UK case studies with exact financial consequences to avoid expensive errors when selling property, shares, or investments in 2025/26.
The mistake: UK residential property sales MUST be reported to HMRC within 60 days of completion via "Report and pay Capital Gains Tax on UK property" online service. Many sellers think "I'll report it on my tax return next January" (too late!). Automatic £100 penalty day 61, then daily penalties after 6 months. Real UK example (2025/26): Kevin sells buy-to-let flat, completion 15 March 2025. CGT owed: £8,000. Deadline to report + pay: 14 May 2025 (60 days after 15 March). Kevin reports on Self Assessment instead (January 2026 deadline): Files Self Assessment 25 January 2026 (thinks he's early!). HMRC penalty notice arrives February 2026: Penalty for missing 60-day deadline: £100 fixed penalty (day 61 late = 15 May onwards). Late by 8 months (May 2025 - January 2026). 6+ months late = £300 penalty OR 5% of tax owed (whichever higher). 5% of £8,000 = £400. 6-month penalty: £400. 12 months late? Another £300/5% (whichever higher). Kevin reports at 10 months (not quite 12 months). Total penalties: £100 + £400 = £500. Plus interest on unpaid tax: £8,000 owed from 14 May 2025. Interest at 7.75% for 8 months: £8,000 × 7.75% × (8 ÷ 12) = £413. Total cost: £500 penalties + £413 interest = £913 extra! If Kevin reported on time (14 May 2025): £0 penalties. £0 interest (paid on time). Cost of mistake: £913. How to avoid: Use GOV.UK "Report and pay CGT on UK property" service within 60 days of completion. Not Self Assessment! Need: property details, completion date, gain calculation, payment (can pay in installments if also filing Self Assessment). Takes 30 minutes online.
The mistake: Not deducting allowable costs when calculating capital gain. HMRC allows: purchase costs (solicitor, stamp duty, surveyor), improvement costs (extension, loft conversion - NOT repairs), selling costs (estate agent, solicitor). Many taxpayers only deduct purchase price, miss £10K-£50K of legitimate costs = massively overpay CGT. Real UK example (2025/26): Maria sells rental property for £350,000. Original purchase 2010: £200,000. Incomplete calculation (common error): Sale price: £350,000. Purchase price: £200,000. Gain: £150,000. Annual exemption: £3,000. Taxable: £147,000. CGT 28% (property, higher rate): £147,000 × 28% = £41,160 tax. What Maria could have claimed: Original purchase (2010): Purchase price: £200,000. Stamp duty: £5,500 (3% on £200K in 2010). Solicitor fees: £1,500. Survey: £400. Total purchase costs: £207,400. Improvements during ownership: Loft conversion 2015: £25,000 (adds bedroom). Kitchen extension 2018: £18,000. New bathroom 2020: £8,000. (NOT repainting £3K, boiler repair £1.2K - these are repairs/maintenance, not improvements). Total improvements: £51,000. Sale costs (2025): Estate agent 1.5%: £5,250. Solicitor: £1,800. EPC certificate: £80. Total sale costs: £7,130. Complete calculation with all costs: Sale price: £350,000. Less: Purchase costs £207,400 + Improvements £51,000 + Sale costs £7,130 = £265,530. Actual gain: £350,000 - £265,530 = £84,470. Annual exemption: £3,000. Taxable: £81,470. CGT 28%: £81,470 × 28% = £22,812. Tax saved: £41,160 - £22,812 = £18,348! How to avoid: Keep ALL receipts for: purchase (solicitor invoice, stamp duty receipt, survey report), improvements (builder invoices, architect fees, planning permission costs), selling (estate agent contract, solicitor completion statement, EPC). HMRC can request evidence - no receipts = no deduction = overpay!
The mistake: Annual CGT exemption is £3,000 per person (2025/26). Use it or lose it - CANNOT carry forward to next year. Many taxpayers with large portfolios never realize small gains annually to use exemption = permanently lose tax-free allowance worth £600-£840/year. Over 20 years = £12K-£17K wasted! Real UK example (2025/26): Gary owns £200,000 shares portfolio (bought for £120,000, unrealized gain £80,000). Plans to sell all in 10 years when retires. Never sells anything annually (worried about tax). Gary's approach (sell all in 10 years): 2035: Portfolio worth £400,000. Gain: £400,000 - £120,000 = £280,000. Annual exemption (2035, assume still £3,000): £3,000. Taxable: £277,000. CGT 20%: £277,000 × 20% = £55,400 tax bill. Smarter approach (use exemption every year): Every year 2025-2034 (10 years): Sell shares worth gain of £3,000. Immediately rebuy same shares (resets cost base). Use annual exemption: £3,000 × 10 years = £30,000 gains tax-free. 2035: Sell remaining portfolio. Original cost base: £120,000. Plus resets from annual sales: £30,000 (10 years × £3,000 exemptions used). New cost base: £150,000. 2035 value: £400,000. Gain: £400,000 - £150,000 = £250,000. Exemption (2035): £3,000. Taxable: £247,000. CGT 20%: £247,000 × 20% = £49,400. Tax saved: £55,400 - £49,400 = £6,000! Even better - Bed & ISA annually: Each year: Sell £3,000 gain worth of shares (CGT-free using exemption). Rebuy inside ISA (£20,000 ISA allowance more than enough). After 10 years: £30,000+ shares moved into ISA (all future growth CGT-free). Remaining £170,000 outside ISA sold in 2035 = much lower CGT bill. Potential total saving: £10K-£20K over 10 years by using exemptions strategically!
The mistake: Selling multiple properties or entire investment portfolio in single tax year. Only get ONE £3,000 exemption per year. Spreading sales over 2-5 years = use multiple exemptions + potentially stay in lower tax bracket. Many retirees make this error when downsizing or liquidating investments. Real UK example (2025/26): Patricia retiring, wants to sell: Buy-to-let flat (gain £40,000), holiday home Spain (gain £25,000, but UK resident = pay UK CGT), shares portfolio (gain £35,000). Total gains: £100,000. Higher rate taxpayer (40% income tax). Option A - Sell all in 2025/26: Total gains: £100,000. Annual exemption: £3,000 (only one!). Taxable: £97,000. CGT rates: Property (UK buy-to-let): £40,000 × 28% = £11,200. Property (Spain, residential): £25,000 × 28% = £7,000. Shares: £35,000 × 20% = £7,000. (Note: exemption allocated against highest rate first = property). Actually: (£40K + £25K - £3K exemption) × 28% + £35K × 20% = £62K × 28% + £35K × 20% = £17,360 + £7,000 = £24,360 total CGT. Option B - Spread over 3 tax years: 2025/26: Sell buy-to-let (gain £40,000). Exemption £3,000. Taxable £37,000. Tax: £37,000 × 28% = £10,360. 2025/26: Sell Spain holiday home (gain £25,000). Exemption £3,000. Taxable £22,000. Tax: £22,000 × 28% = £6,160. 2026/27: Sell shares (gain £35,000). Exemption £3,000. Taxable £32,000. Tax: £32,000 × 20% = £6,400. Total CGT: £10,360 + £6,160 + £6,400 = £22,920. Tax saved: £24,360 - £22,920 = £1,440 by using 3 exemptions instead of 1! Even better - if Patricia retires and income drops: 2025/26 (still working, higher rate 40%): Sell shares only (20% CGT = lower rate). 2025/26 onwards (retired, basic rate 20%): Sell properties. If total income + gain under £50,270, CGT on property drops to 18% (vs 28%!). Potential extra saving: £40K × (28% - 18%) + £25K × (28% - 18%) = £4K + £2.5K = £6,500 more saved by timing around retirement!
The mistake: Not reporting capital losses to HMRC. Losses offset gains (reduce CGT bill), carried forward indefinitely. BUT must report within 4 years of tax year end or lose permanently! Many taxpayers with failed investments never report losses = cannot use them = overpay CGT on future gains. Real UK example (2025/26): Amir invested £50,000 in startup shares 2020/21. Company went bust 2022/23, shares worthless (loss £50,000). Amir never reported loss to HMRC (didn't know he had to). 2025/26: Amir sells rental property, gain £60,000. Without loss offset (didn't report it): Gain: £60,000. Exemption: £3,000. Taxable: £57,000. CGT 28%: £57,000 × 28% = £15,960 tax. If Amir had reported loss in 2022/23: 2022/23: Report loss £50,000 to HMRC (deadline 5 April 2027 = 4 years after 5 April 2023 tax year end). 2025/26: Carry forward loss from 2022/23. Property gain: £60,000. Carried-forward loss: -£50,000. Net gain: £10,000. Exemption: £3,000. Taxable: £7,000. CGT 28%: £7,000 × 28% = £1,960. Tax saved: £15,960 - £1,960 = £14,000! But Amir missed deadline: Loss occurred 2022/23. Deadline to report: 5 April 2027 (4 years). Amir tries to report May 2025 (for 2025/26 property sale). HMRC: "You cannot claim 2022/23 loss now, deadline passed was April 2027". Amir permanently loses £50,000 loss. Cost of not reporting: £14,000 extra CGT paid! How to avoid: Report ALL capital losses to HMRC within 4 years even if no gains that year. File via Self Assessment (losses section) or write to HMRC with: asset details, purchase date/price, sale date/price, loss amount, evidence (contract notes, bankruptcy documents). Once reported, loss banked forever, can use whenever you have gains. Common reportable losses: Failed startup investments (worthless shares). Shares in companies that went into administration. Property sold for less than bought (rare but happens). Crypto investments that crashed. Collectibles sold at loss (art, antiques, wine).
The mistake: Not claiming Principal Private Residence Relief (PPR) when selling main home that was partially rented or you had 2 homes. Entire gain on main home = CGT-free IF you claim PPR properly. Final 9 months ALWAYS exempt even if moved out. Many sellers pay CGT on main home assuming "I rented it one year = no relief" (WRONG - prorated relief applies!). Real UK example (2025/26): Zara bought house 2015, lived there 7 years, rented out final 2 years while living with partner. Sells 2025 for £250,000 gain. Zara's calculation (incorrectly assumes no relief): Gain: £250,000. "I rented it 2 years, so no PPR relief". Annual exemption: £3,000. Taxable: £247,000. CGT 28%: £247,000 × 28% = £69,160 tax. Zara pays this (WRONG!). Correct PPR calculation: Total ownership: 9 years = 108 months (2015-2025). Lived as main home: 7 years = 84 months. Rented out: 2 years = 24 months. Final 9 months: ALWAYS exempt (even though rented). Total exempt period: 84 months (lived) + 9 months (final period) = 93 months. Taxable period: 108 - 93 = 15 months. Gain allocation: Exempt: £250,000 × (93 ÷ 108) = £215,278. Taxable: £250,000 × (15 ÷ 108) = £34,722. CGT on taxable only: Taxable: £34,722. Exemption: £3,000. Taxable: £31,722. CGT 28%: £31,722 × 28% = £8,882 tax. Zara overpaid: £69,160 - £8,882 = £60,278! How Zara can fix this: Amend tax return within 12 months (or 4 years if HMRC error). Submit amended CGT calculation showing PPR relief. Claim refund of £60,278. Other PPR mistakes: Not nominating main residence when owning 2 properties (deadline 2 years from acquiring second property, else HMRC decides which is main). Assuming garden over 0.5 hectare always taxable (WRONG - larger gardens can be exempt if integral to enjoyment of home, e.g., listed building with grounds). Not claiming PPR on inherited property you lived in before selling. Thinking "I worked from home office = loses relief" (WRONG - home office for own business doesn't lose relief unless separate business use with own entrance/customers visiting).
The mistake: Not understanding CGT rates differ by asset type AND income tax band. Residential property = 18% (basic rate) or 28% (higher/additional rate). Shares/investments = 10% (basic rate) or 20% (higher/additional rate). Your rate depends on total taxable income INCLUDING the gain. Many taxpayers use wrong rate = overpay or underpay (then penalties). Real UK example (2025/26): Liam earns £40,000 salary, sells buy-to-let property for £80,000 gain. Thinks "I'm basic rate taxpayer (20%), so CGT is 10%". Liam's incorrect calculation: Gain: £80,000. Exemption: £3,000. Taxable: £77,000. CGT 10%: £77,000 × 10% = £7,700 paid. HMRC notice 2026: "You underpaid CGT. Property gains taxed at 18%/28%, not 10%/20%". Correct calculation: Liam's salary: £40,000. Personal allowance: £12,570. Taxable income: £27,430. Basic rate band: £12,571 - £50,270 (room remaining: £50,270 - £40,000 = £10,270). Gain pushes Liam into higher rate: Gain: £80,000 (after £3,000 exemption = £77,000). £10,270 of gain stays in basic rate (18%). £77,000 - £10,270 = £66,730 in higher rate (28%). CGT: (£10,270 × 18%) + (£66,730 × 28%) = £1,849 + £18,684 = £20,533 correct tax. Liam owes: £20,533 - £7,700 paid = £12,833. Penalties: Careless error: 30% × £12,833 = £3,850. Interest 2 years: £12,833 × 7.75% × 2 = £1,989. Total bill: £12,833 + £3,850 + £1,989 = £18,672! CGT rates cheat sheet (2025/26): RESIDENTIAL PROPERTY: Basic rate (income + gain under £50,270): 18%. Higher/additional rate (income + gain over £50,270): 28%. SHARES, CRYPTO, INVESTMENTS: Basic rate: 10%. Higher/additional rate: 20%. BUSINESS ASSETS (with BADR): 10% flat (up to £1m lifetime). How to calculate YOUR rate: Step 1: Taxable income (salary - personal allowance). Step 2: How much room left in basic rate band? (£50,270 - taxable income). Step 3: If gain fits in remaining basic rate room = use 18% (property) or 10% (shares). Step 4: If gain exceeds room = split. Part at lower rate, part at higher rate. Example: Income £45,000 (taxable £32,430). Room: £50,270 - £45,000 = £5,270. Sell property, gain £20,000. £5,270 × 18% = £948. £14,730 × 28% = £4,124. Total: £5,072.
Access official HMRC CGT services, report property sales within 60 days, claim reliefs, and get expert guidance from trusted UK government and charity sources. All resources verified and updated for 2025/26 tax year.
Official HMRC comprehensive guide to Capital Gains Tax covering all asset types. Topics: What CGT is and when it applies (property, shares, business assets, personal possessions over £6,000), 2025/26 rates (residential property 18%/28%, shares 10%/20%), £3,000 annual exemption (down from £6,000 in 2023/24), how to calculate gains (sale price minus purchase price minus allowable costs), allowable costs you can deduct (purchase costs, improvement costs NOT repairs, selling costs, professional fees), reliefs available (Private Residence Relief for main home, Business Asset Disposal Relief 10% rate up to £1m, Investors' Relief), when you must report disposals (property within 60 days, other assets by 31 January), how to report and pay (online service for property, Self Assessment for other assets). Includes worked examples for: selling buy-to-let property, selling shares outside ISA, transferring assets to spouse (CGT-free), claiming losses to offset future gains. Covers special cases: inherited assets (no CGT on death, beneficiary inherits at probate value), gifts (treated as disposal at market value = potential CGT for giver), crypto assets (subject to CGT like shares). Updated April 2024 for 2025/26 tax year.
MANDATORY online service for reporting UK residential property disposals within 60 days of completion. Failure = £100+ penalties! Use this service for: sales of buy-to-let properties, second homes, holiday homes, inherited properties you didn't live in, any residential property that's not your main home (or partially your main home). Must report even if no tax due (e.g., covered by exemption, loss made). Process: Create Government Gateway account (or sign in), complete online return with property details (address, purchase date/price, sale date/price, completion date), calculate gain (can use HMRC calculator), claim allowable costs (purchase fees, improvements, selling fees), claim reliefs (Private Residence Relief if lived there, Lettings Relief if applicable), calculate CGT owed, pay immediately or set up payment plan (if also filing Self Assessment can spread payments). Deadline: Strict 60 days from completion date (not exchange!). Example: Complete 15 March 2025 → deadline 14 May 2025 (calendar days, not working days). Late = £100 penalty day 1, then escalating fines. Can amend return within 12 months if errors. Payment options: debit card (instant), bank transfer (3-5 days, use reference provided), payment plan if filing Self Assessment (spread across tax year). Service saves time vs Self Assessment (instant calculation, no waiting until January). Also use for: reporting losses on property sales (must report even if no gains to offset, preserves loss for future use).
Official HMRC publication of all Capital Gains Tax rates, thresholds, and allowances updated annually (published April each year). 2025/26 rates: Annual exempt amount £3,000 per person (halved from £6,000 in 2023/24, further down from £12,300 in 2022/23). CGT rates on residential property: 18% for basic rate taxpayers (total income + gain under £50,270), 28% for higher and additional rate taxpayers (over £50,270). CGT rates on shares and investments: 10% for basic rate, 20% for higher/additional rate. Business Asset Disposal Relief (BADR, formerly Entrepreneurs' Relief): 10% on first £1 million of qualifying business disposals over lifetime. Investors' Relief: 10% on disposal of unlisted shares in trading companies (up to £10m lifetime, strict conditions). Carried interest: 28% on certain performance-related rewards. Trustees and personal representatives: 24% on most gains (20% on residential property). Document also covers: how to determine your tax band for CGT purposes (add income + gain, if total exceeds £50,270 higher rate applies), interaction with income tax (gains added after income to determine rate), treatment of losses (offset in same year, carry forward indefinitely), reporting thresholds (must report if total disposals exceed £49,200 even if gains below £3,000). Historical rates included (back to 2011/12) for calculating gains on assets held long-term. Essential for: tax planning before disposals, checking correct rate applied, understanding how income affects CGT rate (e.g., £45K salary + £10K gain = part basic, part higher rate).
Step-by-step guide to reporting and paying CGT based on asset type and timing. Reporting methods: UK residential property: MUST use "Report and pay CGT on UK property" online service within 60 days of completion (separate from Self Assessment). Shares, crypto, business assets, overseas property: Report on Self Assessment tax return (deadline 31 January following tax year, e.g., 2025/26 disposals = file by 31 Jan 2026). When you must report: If total gains (before deducting exemption) exceed £3,000 annual exemption. If total proceeds (sale prices) exceed £49,200 even if gains below £3,000. If selling UK residential property (must report even if no tax due). To claim losses for future use. Payment deadlines: UK residential property: Pay within 60 days via online service (or late payment interest charged). All other assets: Pay by 31 January following tax year (can make payments on account if registered for Self Assessment). Late payment charges: Interest at HMRC rate (currently 7.75%/year) from deadline date. 30-day surcharge: 5% of unpaid tax if still unpaid 30 days after deadline. 6-month surcharge: another 5% if unpaid 6 months after deadline. 12-month surcharge: another 5% if unpaid 12 months late. Paying CGT: Online via Government Gateway (instant), bank transfer/CHAPS (3-5 days), debit/credit card (3% fee), by post via cheque (allow 3 working days, not recommended). Payment plans: Can request Time to Pay arrangement if cannot pay immediately (call HMRC 0300 200 3822, must owe under £30,000, agree monthly installments over 12 months max). Records to keep: All purchase documents (contracts, solicitor invoices, stamp duty receipts), improvement invoices (extensions, renovations), selling documents (estate agent fees, solicitor completion statement, EPC), evidence of use (Private Residence Relief claims need proof of occupation), share dealing records (contract notes, dividend statements, corporate action notices). Keep 5 years after 31 January filing deadline.
Free, impartial Capital Gains Tax guidance from UK's largest independent advice charity. Not HMRC (independent), helps you understand your rights and challenge incorrect bills. CGT help available: Understand when CGT applies (property, shares, business assets vs exempt assets like cars, main home, ISAs, Premium Bonds, personal possessions under £6,000), calculate gains correctly (sale price minus purchase costs minus improvements minus selling costs), claim all available reliefs (Private Residence Relief for main home even if partially rented, Business Asset Disposal Relief if selling business, transfer to spouse CGT-free), report gains on time (60-day property deadline vs Self Assessment deadline), challenge HMRC assessments (dispute incorrect CGT calculations, prove allowable costs claimed were legitimate, argue for reliefs HMRC denied), deal with penalties (appeal late filing fines, argue reasonable excuse for missing 60-day deadline, request penalty reduction), set up payment plans (Time to Pay if cannot afford CGT bill immediately, negotiate affordable monthly payments). Common issues Citizens Advice helps with: "HMRC says I owe CGT on my main home sale" (help prove Private Residence Relief applies, calculate exempt periods correctly, challenge HMRC if wrong). "I missed 60-day property deadline" (help appeal penalty, draft reasonable excuse letter, represent at tribunal if needed). "HMRC disallowed my improvement costs" (gather evidence, prove costs were improvements not repairs, challenge decision). Access help: Online guides (detailed articles on CGT calculations, reliefs, deadlines, penalties), webchat advisor (Monday-Friday 9am-5pm, 15-min average wait), phone helpline England 0800 144 8848 / Wales 0800 702 2020, local bureau (face-to-face appointments for complex CGT issues, bring all documents). Free service, no fees ever.
Speak directly to HMRC CGT specialists by phone for complex queries. Phone: 0300 200 3300 (select CGT option from menu, Monday-Friday 8am-6pm, closed bank holidays). Average wait: 15-40 minutes (peak Jan-April = 60+ min, quiet Aug-Dec = 10-15 min). Calls: Local rate (free if in mobile/landline minutes, avoid premium rate). Use helpline for: Technical CGT questions (does my disposal qualify for Private Residence Relief? Can I claim improvement costs from 15 years ago?), reporting issues (can't submit 60-day property return online, system errors, need paper form), payment problems (set up Time to Pay arrangement, confirm payment received, query interest charges), complex calculations (multiple disposals same year, mixture of property and shares, cross-border issues if non-UK resident), relief eligibility (Business Asset Disposal Relief conditions, confirm if qualify, how to claim), penalties and appeals (dispute late filing penalty, explain reasonable excuse, request penalty reduction), amendment queries (need to correct submitted return, add forgotten costs, claim relief missed first time). Have ready before calling: National Insurance number, Unique Taxpayer Reference (UTR) if registered for Self Assessment, property address or asset details, disposal dates (exchange and completion for property), gain calculations (even if draft/estimate), previous correspondence reference numbers if following up. Advisors can: Confirm if CGT applies, explain which rate to use, clarify reporting deadlines, help with online service issues, set up payment plans (max £30K, 12 months), confirm allowable costs, explain relief rules. Advisors CANNOT: Calculate your exact gain (you must do this), give personalized tax advice (consult accountant for complex planning), override system-generated penalties without appeal. Tip: Call 8am sharp for shortest wait (before 9am rush), avoid Jan-April (Self Assessment deadline period), have all documents ready to speed up call.
Reviewed by: Chartered Tax Advisors (CTA) & Chartered Accountants (ACA)
Last updated: (2025/26 tax year)
CGT allowance: £3,000 for 2025/26 (down from £6,000 in 2023/24)
✅ Accuracy Guarantee: All CGT rates, exemptions, and guidance verified against official HMRC sources. Rates accurate for 2025/26 tax year.
⚠️ Disclaimer: This calculator provides estimates. CGT can be complex depending on asset type, holding period, and personal circumstances. Always consult HMRC or a qualified tax advisor for personalized advice, especially for large disposals.
✓ Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: January 2026.