You've sold something for more than you paid for it, and now you want a straight answer: how much is capital gains tax going to cost you?
The honest reply is "it depends", but not in a vague way. It depends on a few things you can actually pin down: what you sold, how big the gain is, and how much you earn. Once you have those three numbers, the maths is simple.
This guide gives you the current capital gains tax (CGT) rates for 2025/26, the tax-free allowance, and a worked example you can follow line by line. It's written for individuals, including landlords and business owners selling assets. If you're in Scotland, your Income Tax bands differ, but CGT rates are the same across the UK.
What is capital gains tax?
Capital gains tax is a tax on the profit you make when you sell or "dispose of" an asset that has gone up in value. You're taxed on the gain, not the total amount you receive.
Common assets that trigger CGT include a second home or rental property, shares held outside an ISA or pension, a business or part of one, and valuable personal possessions worth more than £6,000 (other than your car).
Some disposals are usually free of CGT. Selling your main home normally qualifies for Private Residence Relief, and gifts between spouses or civil partners are made on a no-gain, no-loss basis. Assets inside an ISA or pension are sheltered too.
How much is capital gains tax in 2025/26?
The rate you pay depends on the type of asset and which Income Tax band your gain falls into once it's stacked on top of your income.
For 2025/26, these are the main CGT rates for individuals:
| What you sold | Gain within your basic-rate band | Gain above the basic-rate band |
|---|---|---|
| Most assets (shares, business assets, crypto) | 18% | 24% |
| Residential property (not your main home) | 18% | 24% |
| Gains qualifying for Business Asset Disposal Relief | 14% | 14% |
The standard rates of 18% and 24% have applied to most assets since 30 October 2024. Since 6 April 2025, residential property is taxed at the same 18% and 24% rates as other assets, so there's no longer a separate, higher property rate. (Sources: gov.uk CGT rates and allowances, gov.uk CGT rates.)
Business Asset Disposal Relief (BADR), which can apply when you sell all or part of a qualifying business, is charged at 14% for 2025/26 for disposals on or after 6 April 2025, up from the previous 10%. (gov.uk CGT rates and allowances.)
What is the capital gains tax allowance?
Every individual gets an annual exempt amount, often called the CGT allowance. For 2025/26 it's £3,000. (gov.uk CGT rates and allowances.)
This is the amount of total gains you can make in the tax year before any CGT is due. It can't be carried forward, so if you don't use it, you lose it. For couples, each person has their own £3,000, which is one reason jointly owned assets can be worth planning around.
A quick note on the basic-rate band. The 18% rate applies to the part of your gain that sits within your unused basic-rate band. For 2025/26 the basic-rate band covers taxable income up to £37,700 above your Personal Allowance of £12,570. (gov.uk Income Tax rates.) The more of that band your income already uses, the less of your gain is taxed at 18% rather than 24%.
How do you work out capital gains tax?
The process is the same whatever you're selling. Here are the steps.
- Work out the gain. Take the sale proceeds, then subtract what you paid for the asset and allowable costs (buying and selling fees, and capital improvements such as an extension, but not normal repairs).
- Add up your gains for the year and deduct any allowable losses, including losses carried forward from earlier years.
- Take off the annual exempt amount of £3,000.
- Stack the taxable gain on top of your taxable income. This decides how much falls in the basic-rate band (taxed at 18%) and how much sits above it (taxed at 24%).
- Apply the rates to each slice and add them together.
The fifth step is where most people slip up, so the examples below show it in full.
Worked example: selling a rental flat
Illustrative example. Marcus is a higher-rate taxpayer who sells a rental flat. He bought it for £240,000, sells it for £320,000, and pays £8,000 in legal and estate agent fees on the sale. The flat has never been his main home.
| Step | Amount |
|---|---|
| Sale proceeds | £320,000 |
| Less purchase price | (£240,000) |
| Less allowable selling costs | (£8,000) |
| Gain | £72,000 |
| Less annual exempt amount | (£3,000) |
| Taxable gain | £69,000 |
Because Marcus is already a higher-rate taxpayer, his whole taxable gain sits above the basic-rate band, so it's all taxed at 24%:
£69,000 × 24% = £16,560.
That's his CGT bill on the flat for 2025/26.
Worked example: selling shares as a basic-rate taxpayer
Illustrative example. Aisha sells shares held outside an ISA. Her taxable income (after her Personal Allowance) is £30,000 for the year, so she has used £30,000 of her £37,700 basic-rate band, leaving £7,700 of room. She sells shares for £25,000 that originally cost her £6,000.
| Step | Amount |
|---|---|
| Sale proceeds | £25,000 |
| Less purchase cost | (£6,000) |
| Gain | £19,000 |
| Less annual exempt amount | (£3,000) |
| Taxable gain | £16,000 |
Now the gain is stacked on top of her income. She has £7,700 of basic-rate band left, so:
- First £7,700 of the gain at 18% = £1,386
- Remaining £8,300 (£16,000 - £7,700) at 24% = £1,992
- Total CGT = £3,378
Same £16,000 taxable gain, but Aisha pays less than 24% across the whole gain because part of it used up her remaining basic-rate band at 18%. This is why your income matters as much as the gain itself.
You can sanity-check your own figures with our capital gains tax calculator before you commit to a sale.
When and how do you report and pay CGT?
This depends on what you've sold, and the property deadline catches a lot of people out.
UK residential property. If you sell a UK residential property that isn't your main home and there's CGT to pay, you must report and pay it within 60 days of completion using a Capital Gains Tax on UK property account. Miss it and HMRC can charge interest and a penalty. (gov.uk: report and pay CGT on UK property.)
Other assets, such as shares. You report these through your annual Self Assessment tax return. The deadline to file online and pay is 31 January following the end of the tax year. So a gain made in 2025/26 is reported by 31 January 2027. (gov.uk Self Assessment deadlines.)
If you already file a Self Assessment return, you still report a property gain there as well, but the 60-day payment on account comes first. Getting this sequencing right is exactly the sort of thing our self assessment service takes off your plate.
How can you legally reduce your CGT bill?
You can't make a real gain vanish, but a few legitimate moves can shrink the tax on it.
- Use both partners' allowances and bands. Transferring a share of an asset to a spouse or civil partner before sale can use two annual exempt amounts and two basic-rate bands.
- Time your disposals. Spreading sales across two tax years can use two £3,000 allowances rather than one.
- Claim your losses. Capital losses, including ones carried forward, reduce your gains. Report losses even in a year you don't owe tax, so they're on record.
- Don't forget allowable costs. Capital improvements and buying and selling fees all reduce the gain.
- Check the reliefs. Business Asset Disposal Relief and gift relief can change the picture significantly when you sell a business or business asset.
If you run a company and are thinking about selling shares or the trade itself, the interaction between CGT, BADR and your wider tax position is worth proper advice. See our pages for landlords and limited companies for how we help in each case.
Thinking about a sale and want to know the real number before you commit? Book a free 20-minute call with a Zmartly accountant through our tax advisory service, and we'll work through your gain, your reliefs and your reporting deadlines with you.
Frequently asked questions
How much is capital gains tax on property in 2025/26?
For a UK residential property that isn't your main home, CGT is 18% on the part of the gain within your basic-rate band and 24% on the part above it, for 2025/26. The same rates apply to most other assets. Your main home is normally exempt under Private Residence Relief.
What is the capital gains tax allowance for 2025/26?
The annual exempt amount is £3,000 for individuals for 2025/26. You can make total gains up to this figure in the tax year before any CGT is due. It can't be carried forward to the next year.
Do I pay capital gains tax when I sell my main home?
Usually no. Selling your only or main residence normally qualifies for Private Residence Relief, so there's typically no CGT. It can apply differently if you've let the property out, used part of it exclusively for business, or the grounds are very large.
How quickly do I have to pay CGT on a property sale?
If CGT is due on a UK residential property, you must report and pay it within 60 days of completion using a Capital Gains Tax on UK property account. Late reporting or payment can lead to interest and penalties.
Does my income affect how much capital gains tax I pay?
Yes. Your taxable gain is stacked on top of your taxable income. The part that still falls within your basic-rate band is taxed at 18%, and anything above it at 24%, so a higher income usually means more of your gain is taxed at the higher rate.
