Capital Gains Tax Rates 2025/26: The Complete UK Guide
Everything you need to know about CGT rates, exemptions, reliefs and reporting after the October 2024 Autumn Budget changes.
CGT Rates for 2025/26
Capital Gains Tax rates for the 2025/26 tax year (and from 30 October 2024) are as follows:
| Asset Type | Basic Rate Taxpayer | Higher/Additional Rate |
|---|---|---|
| Shares, funds, crypto, other assets | 18% | 24% |
| Residential property (non-PRR) | 18% | 24% |
| Business assets (BADR qualifying) | 14% | 14% |
| Investor's Relief qualifying gains | 14% | 14% |
| Carried interest | 32% | 32% |
Use our Capital Gains Tax Calculator to work out exactly how much CGT you owe based on your income and gains.
What Changed in October 2024
The Autumn Budget 2024, delivered on 30 October 2024 by Chancellor Rachel Reeves, brought significant changes to CGT that took effect immediately:
| Rate Type | Before 30 Oct 2024 | From 30 Oct 2024 |
|---|---|---|
| Basic rate (non-property) | 10% | 18% |
| Higher rate (non-property) | 20% | 24% |
| Basic rate (residential property) | 18% | 18% (unchanged) |
| Higher rate (residential property) | 28% | 24% (reduced) |
| Business Asset Disposal Relief | 10% | 14% (2025/26), 18% (from April 2026) |
| Investor's Relief | 10% | 14% (2025/26), 18% (from April 2026) |
Annual CGT Exemption 2025/26
Every UK individual has an Annual Exempt Amount (AEA) of £3,000 for 2025/26. This means the first £3,000 of net gains in the tax year is completely free from CGT.
| Tax Year | Annual Exempt Amount |
|---|---|
| 2022/23 | £12,300 |
| 2023/24 | £6,000 |
| 2024/25 | £3,000 |
| 2025/26 | £3,000 |
The exemption has been dramatically reduced from £12,300 in 2022/23, meaning far more people now need to report and pay CGT. Trusts have a lower exemption of £1,500 for 2025/26.
What Triggers Capital Gains Tax
CGT arises when you dispose of a chargeable asset and make a gain. A disposal includes:
- Selling an asset (shares, property, business, land, collectibles)
- Gifting an asset (market value is used as the disposal proceeds)
- Exchanging one asset for another
- Receiving compensation or insurance proceeds for an asset
- Losing or destroying an asset and receiving a payout
- Transferring assets into or out of a trust
Simply holding an asset that increases in value does not trigger CGT. The tax only applies when a disposal takes place.
How to Calculate Your Capital Gain
Your chargeable gain is calculated as:
CGT Calculation Formula
Chargeable Gain = Disposal Proceeds − Acquisition Cost − Allowable Costs − Annual Exempt Amount
- Disposal proceeds: What you received for the asset (or market value if gifted)
- Acquisition cost: What you originally paid, plus incidental costs of acquisition
- Allowable costs: Improvement costs, professional fees (solicitors, surveyors), disposal costs (estate agents, legal fees)
- Annual exempt amount: £3,000 for 2025/26
Worked Example: Selling a Second Property
You bought a second property in 2015 for £220,000. You sell it in April 2025 for £380,000. You paid £5,000 in solicitor fees when buying, spent £15,000 on an extension, and paid £8,000 in estate agent and legal fees on sale.
- Disposal proceeds: £380,000
- Less acquisition cost: −£220,000
- Less purchase costs: −£5,000
- Less improvement costs: −£15,000
- Less sale costs: −£8,000
- Gross gain: £132,000
- Less annual exemption: −£3,000
- Taxable gain: £129,000
If you are a higher rate taxpayer: £129,000 × 24% = £30,960 CGT
Assets Exempt from CGT
Not all assets are subject to CGT. The following are fully exempt:
- Main home (Primary Residence): Fully exempt under Private Residence Relief if it has been your only or main home throughout ownership
- ISA and LISA investments: All gains within an Individual Savings Account or Lifetime ISA are completely free from CGT
- Pension funds: Growth within pensions is CGT-free
- Cars: Private motor vehicles are exempt (regardless of value)
- Wasting chattels: Personal possessions with a useful life of 50 years or less (watches, racehorses, boats with an engine)
- Lottery and gambling winnings: Completely exempt
- Gifts to UK registered charities: Exempt from CGT
- Government gilts and NS&I savings certificates: Exempt from CGT
- UK qualifying corporate bonds: Exempt
- Decorations for bravery: Exempt if disposed of by the original recipient
Business Asset Disposal Relief (BADR)
Business Asset Disposal Relief, formerly known as Entrepreneurs' Relief, allows qualifying business owners to pay a reduced CGT rate when they sell their business or shares.
| Feature | Details |
|---|---|
| Rate 2025/26 | 14% |
| Rate from April 2026 | 18% |
| Lifetime allowance | £1,000,000 of qualifying gains |
| Minimum ownership period | 2 years before disposal |
| Minimum shareholding | 5% of shares and voting rights |
| Employment requirement | Must be an employee or officer of the company |
BADR applies to disposals of the whole or part of a trading business, shares in a personal company, and certain associated assets. It does not apply to investment companies or buy-to-let property businesses.
Investor's Relief
Investor's Relief is a separate relief for investors in unlisted trading companies. It provides the same reduced CGT rate as BADR (14% in 2025/26, rising to 18% from April 2026) but with a separate £1 million lifetime limit.
To qualify, shares must have been newly issued and subscribed for cash on or after 17 March 2016, held continuously for at least three years, and the investor must not be an employee or officer of the company (distinguishing it from BADR).
CGT on Residential Property
Residential property CGT has two crucial differences from other assets:
1. Private Residence Relief (PRR)
If the property has been your only or main home for the entire period of ownership, the gain is fully exempt. If you lived there for only part of the time, you receive partial relief proportional to the period of occupation. The final 9 months of ownership always qualify for PRR even if you have moved out (reduced from 36 months prior to April 2020).
2. 60-Day Reporting Requirement
Unlike other assets (reported through Self Assessment), a CGT liability on UK residential property must be reported and paid to HMRC within 60 days of completion using the online Real Time Capital Gains Tax service. Failure to report within 60 days incurs automatic penalties and interest.
Lettings Relief
Lettings relief was significantly restricted from April 2020. It now only applies if you shared occupation of the property with the tenant at the same time. If it applies, the relief is the lower of: the amount of PRR, the gain from the let period, or £40,000.
CGT Tax Planning Strategies
Bed and ISA
Sell assets outside an ISA to realise gains (using your annual exemption), then repurchase the same assets inside a Stocks and Shares ISA. Future gains and income within the ISA are tax-free. You cannot put the same assets directly into an ISA without selling first (no "in specie" transfers for most shares).
Bed and Spouse
Transfers between spouses or civil partners are at no gain/no loss. You can transfer assets to your spouse and they can then sell, using their own annual exemption and potentially a lower CGT rate band. Combined, a couple can shelter £6,000 of gains per year (2 x £3,000 exemptions) and each partner can use their basic rate band before higher rates apply.
EIS and SEIS Deferral Relief
Investing in qualifying Enterprise Investment Scheme (EIS) companies allows you to defer CGT on other assets. The deferred gain is reinvested and only becomes chargeable when you sell the EIS shares. SEIS (Seed EIS) provides up to 50% income tax relief and can be used to reduce CGT liability on gains that are reinvested in qualifying SEIS companies.
Pension Contributions
Making a pension contribution increases the basic rate band by the gross amount contributed. This can push gains that would otherwise be taxed at 24% into the 18% band. For example, contributing £10,000 net to a pension (£12,500 gross) creates an additional £12,500 of basic rate band capacity for CGT purposes.
Timing Disposals
Spreading disposals across two tax years (each side of 5 April) allows you to use two annual exemptions. If you are close to the higher rate threshold, deferring to the next year when you might be a basic rate taxpayer can reduce CGT from 24% to 18%.
Cryptocurrency and CGT
HMRC treats cryptocurrency as a capital asset rather than currency. Every time you dispose of crypto, CGT potentially applies. Disposals include:
- Selling crypto for fiat currency (pounds, dollars, euros)
- Exchanging one cryptocurrency for another
- Using crypto to pay for goods or services
- Gifting crypto to anyone other than a spouse or civil partner
The same 18%/24% rates apply for 2025/26. Crypto uses the share identification rules (same-day rule, 30-day bed and breakfast rule, then pool). Poor record-keeping is the biggest compliance risk — keep detailed records of every transaction, including date, amount, value in GBP at time of transaction, and fees paid.
How to Report Capital Gains Tax
Property: 60-Day Service
UK residential property gains must be reported within 60 days of completion using HMRC's online service. You need a Government Gateway account. Any CGT due must also be paid within this 60-day window. An estimated amount can be paid if not all the information is available — it can be corrected via Self Assessment.
Other Assets: Self Assessment
All other CGT disposals are reported via the Self Assessment tax return. You must file if:
- Your total gains exceed the annual exempt amount (£3,000)
- Your total disposal proceeds exceed £12,000 (four times the exempt amount)
- You made a loss you wish to register with HMRC
- You are already required to file a Self Assessment return
The Self Assessment deadline is 31 January following the end of the tax year. Late filing and late payment attract automatic penalties and interest.
Using Capital Losses
Capital losses can be set against capital gains in the same tax year, reducing your taxable gain. If losses exceed gains in a tax year, the excess can be carried forward indefinitely to future tax years.
Losses are applied before the annual exemption, not after. This means losses are less valuable if they reduce your gains below the annual exempt amount — you do not get to "save" the exemption.
Losses on disposals to connected persons (family members other than spouse) can only be offset against gains from the same connected person, not against gains from third-party disposals.
Frequently Asked Questions
For 2025/26, the CGT rates are 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. These rates apply to both residential property and other chargeable assets. Business Asset Disposal Relief applies a reduced rate of 14% on qualifying business disposals up to a £1 million lifetime limit.
Yes. From 30 October 2024, CGT rates were increased. The main rates rose from 10%/20% to 18%/24%. Residential property rates, which were 18%/28%, were reduced to 18%/24% to align with the new standard rates. Business Asset Disposal Relief rose from 10% to 14% in 2025/26 and will increase further to 18% from April 2026. The annual exemption remained at £3,000 (reduced from £12,300 in 2022/23).
The Capital Gains Tax annual exempt amount for 2025/26 is £3,000. This means you can make gains of up to £3,000 in the tax year before paying any CGT. This allowance cannot be carried forward, so it is worth using each year if possible. The exemption was £12,300 as recently as 2022/23, making it significantly less valuable today.
If the property is your main home and you have lived in it for the entire period of ownership, it is fully exempt from CGT through Private Residence Relief. However, if the property was let out, was a second home, or you had periods of non-occupation, part of the gain may be taxable. CGT on residential property must be reported and paid within 60 days of completion using HMRC's Real Time Capital Gains Tax service.
For residential property, report and pay within 60 days of completion using HMRC's Real Time Capital Gains Tax service. For other assets, report via Self Assessment if your total gains exceed £3,000 or total proceeds exceed £12,000 in the tax year. The Self Assessment deadline is 31 January following the end of the tax year. Late filing and late payment attract automatic penalties and interest charges.
Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs' Relief, is a reduced CGT rate that applies when you sell qualifying business assets. For 2025/26 the rate is 14%, rising to 18% from April 2026. There is a lifetime limit of £1 million of qualifying gains. To qualify, you generally need to have owned the business for at least two years, held at least 5% of shares and voting rights, and been an employee or director of the company.
Related Calculators and Guides
This guide is for information purposes only and does not constitute financial or tax advice. Tax rules are complex and depend on individual circumstances. Always consult a qualified tax adviser or accountant before making tax decisions. Rates and thresholds are correct for the 2025/26 tax year based on HMRC guidance current at February 2026.