Capital Gains Tax is charged on the profit you make when you sell or dispose of an asset that has increased in value. It applies to shares, investment properties, crypto assets, business assets, and certain personal possessions worth over £6,000. Your main home is usually exempt under Private Residence Relief.
2025/26 Rates and Allowances
The annual exempt amount for 2025/26 is £3,000. This is the amount of capital gains you can make each year before any CGT is due. It has been reduced significantly from £12,300 just a few years ago.
The tax rates depend on your income tax band and the type of asset. For residential property, the rates are 18% (basic rate) and 24% (higher rate). For other assets including shares and crypto, the rates are 10% (basic rate) and 20% (higher rate). These rates are set to increase from April 2026.
Key Reliefs
Business Asset Disposal Relief (formerly Entrepreneurs' Relief) offers a reduced 10% CGT rate on qualifying business disposals, up to a lifetime limit of £1 million. Investors' Relief provides a similar 10% rate for qualifying shares held for at least three years. Gift Hold-Over Relief allows you to defer CGT when gifting business assets.
Practical Strategies
Use your annual exempt amount every year — it cannot be carried forward. If you are married or in a civil partnership, transfers between spouses are CGT-free, which means you can effectively double your exempt amount by transferring assets before selling. Consider the timing of disposals across tax years to make use of both years' allowances.
Use our capital gains tax calculator to estimate your liability and see how different reliefs affect the amount you owe.
M. Samiuddin QUADRI is a chartered certified accountant at Gladstone & Co. Accountants, advising clients on capital gains tax planning and disposal strategies.