Last updated: March 2026.
What changed in October 2024
The Autumn 2024 Budget raised UK Capital Gains Tax rates with immediate effect from 30 October 2024. The previous rates of 10% (basic) and 20% (higher/additional) on non-residential gains rose to 18% and 24% respectively. Residential property gains were already at 18%/24% so no change there.
The CGT annual exempt amount remained at £3,000, having been reduced from £12,300 in stages over recent tax years.
UK CGT rates at a glance (2025/26)
| Asset / situation | Basic-rate band | Higher / additional rate |
|---|---|---|
| Shares, funds, crypto, most assets | 18% | 24% |
| UK residential property (not main home) | 18% | 24% |
| Carried interest | 32% | 32% |
| Business Asset Disposal Relief (BADR) | 14% (rising to 18% from April 2026) | 14% (rising to 18% from April 2026) |
| Annual exempt amount | £3,000 | £3,000 |
Note: BADR (formerly Entrepreneurs' Relief) on the first £1 million of qualifying business sale gains rose from 10% to 14% in April 2025, with a further increase to 18% scheduled for April 2026.
How CGT is calculated
The basic formula:
Gain = Disposal proceeds − Original cost − Allowable expenses
Allowable expenses include acquisition costs (stamp duty, legal fees on purchase) and disposal costs (estate agent fees, legal fees on sale).
The first £3,000 of total gains in the tax year is tax-free. The remainder is taxed at 18% to the extent it fits within the basic-rate income band (£37,700 in 2025/26, after personal allowance), and at 24% above that.
The seven main CGT planning strategies
1. Use your annual exempt amount every year
The £3,000 annual exempt amount is use-it-or-lose-it. If you have investments standing at a gain, consider realising £3,000 of gain each year, even if you immediately re-invest. Over five years that's £15,000 of tax-free gains crystallised.
2. Bed and ISA
Sell investments held outside an ISA, immediately buy them back inside your ISA. Future growth is then CGT-free permanently. The disposal crystallises any existing gain (which can be sheltered within the £3,000 annual exempt amount). Most platforms offer this as a single transaction.
3. Bed and pension
Similar to bed and ISA, but using a personal pension wrapper instead. Useful if you've already used your ISA allowance and have annual pension allowance available. Tax relief on the pension contribution may further reduce the effective cost.
4. Spousal transfers
Transferring assets between spouses or civil partners is CGT-free. This doubles the annual exempt amount available to the couple and lets you use the lower-earning spouse's basic-rate band. A common move: transfer half a portfolio to a non-earning spouse before sale, so half the gain is taxed at 18% rather than 24%.
5. Carry forward capital losses
If you've made losses in previous years (and reported them on your tax return), they can be carried forward indefinitely to offset future gains. Many people fail to claim losses, particularly on failed startup investments or crypto write-offs, and forfeit the relief.
6. EIS, SEIS and VCT deferral
Reinvesting a gain into Enterprise Investment Scheme (EIS) shares can defer the CGT until the EIS shares are sold (often years later, potentially when in a lower band). EIS and SEIS schemes also offer income tax relief and IHT benefits. Venture Capital Trusts (VCTs) offer 30% income tax relief and tax-free dividends but no CGT deferral.
These are high-risk investments, only suitable for investors who understand and can tolerate the loss of capital.
7. Charitable donations of appreciated assets
Donating shares or property directly to a UK charity is CGT-free and qualifies for income tax relief at the asset's market value. For highly appreciated assets, this can be the most tax-efficient way to support a cause. See our tax-efficient giving guide.
Worked example: a higher-rate taxpayer
Anna is a higher-rate taxpayer with a non-ISA share portfolio standing at a £25,000 gain. She wants to realise the gain over the next few years.
No planning: selling all in one year, gain £25,000, less £3,000 exempt = £22,000 taxable at 24% = £5,280 tax.
Multi-year approach: spread the disposal over 4 tax years (~£6,250 gain each year). Each year uses the £3,000 exempt amount, leaving £3,250 taxable at 24% = £780 tax. Total over 4 years: £3,120 tax, a saving of £2,160.
With spousal transfer: transfer half the portfolio to her non-working spouse before sale. Her spouse uses their own £3,000 exempt amount and pays at 18% on the rest (within basic-rate band). Combined tax can drop to around £1,800–£2,400 depending on her spouse's other income.
UK residential property gains
Property other than your main home (second homes, buy-to-let, inherited property held before sale) attracts CGT at 18%/24%. The deadlines are tighter, you must:
- Report the gain and pay the tax within 60 days of completion using HMRC's online Capital Gains Tax on UK Property service
- Also report it on your Self Assessment for the tax year (any over/underpayment is reconciled there)
Private Residence Relief exempts gains on your main home. If you've owned multiple properties at the same time, the relief calculation depends on which was treated as your main residence at each point.
Frequently asked questions
When do I need to report a Capital Gain?
If total gains in the tax year exceed the annual exempt amount (£3,000), or if disposal proceeds exceed £50,000, you need to report on your Self Assessment tax return. UK residential property disposals require reporting within 60 days via a separate online return.
Do gifts to my spouse trigger CGT?
No. Transfers between UK-domiciled spouses and civil partners are on a 'no gain, no loss' basis, no CGT arises, but your spouse inherits your original cost base for any future disposal.
Can I use losses from previous years?
Yes. Capital losses can be carried forward indefinitely and used to offset future gains. They must be claimed by reporting them on your tax return within 4 years of the loss.
Are gains inside an ISA subject to CGT?
No. Gains on investments held inside an ISA or pension are completely free of CGT. This is one of the biggest reasons to use ISA and pension allowances fully each year.
What happens if I move abroad before selling?
UK CGT generally only applies to UK residents (with exceptions for UK residential property and some business assets, which can apply regardless of residence). If you become non-UK resident, future gains may fall outside UK CGT, but there are complex anti-avoidance rules including the temporary non-residence rule. Take specialist advice before relying on this.