Capital Gains Tax UK: A Guide for Individuals and Finance Professionals

What Is Capital Gains Tax?

Capital gains tax (CGT) is charged on the profit (gain) made when you dispose of a capital asset that has increased in value. It applies to individuals, trustees, and personal representatives — companies pay corporation tax on gains, not CGT. CGT applies to assets including shares, investment property, business assets, and valuable personal possessions above £6,000.

CGT Rates 2026

Following the October 2024 Autumn Budget, the CGT rates are: Basic rate taxpayers pay 18% on residential property gains and 18% on other gains. Higher and additional rate taxpayers pay 24% on residential property gains and 24% on other gains. Business Asset Disposal Relief (BADR) reduces the rate to 18% for qualifying business disposals from April 2026 (it was 14% from April 2025 to March 2026, having risen from 10% before that, per the October 2024 Budget). The Annual Exempt Amount is £3,000 per individual for 2025/26 and 2026/27.

Calculating a Capital Gain

Disposal proceeds minus acquisition cost minus allowable costs (legal fees, improvement costs, but not maintenance). If received as a gift, market value at date of gift replaces proceeds. If inherited, probate value is the acquisition cost. Index-linked acquisition costs no longer apply for individuals (indexation allowance was abolished for individuals from 2008).

Principal Private Residence Relief

Your main home is generally exempt from CGT under PPR relief. If you have lived in the property for all of your ownership, the full gain is exempt. A final 9 months of ownership always qualifies for PPR regardless of whether you still live there (reduced from 18 months in April 2020).

Reporting and Payment

Residential property gains must be reported and CGT paid within 60 days of completion via HMRC's CGT on UK property account. Other gains are reported via Self Assessment with payment due by 31 January following the tax year.

Further Reading

• ACCA TX Guide
• ACCA ATX Guide
• AAT Personal Tax Guide

CPD for Tax Professionals

Keep your CGT knowledge current with Learnsignal's CPD courses for ACCA, CIMA, and ICAEW members. Explore CPD.

FAQ

Do I pay CGT on selling my home?

Usually no — your main residence qualifies for Principal Private Residence relief. CGT applies if you have let the property, have another main residence, or the property is very large. A tax adviser can confirm your position.