Capital gains tax — UK rates — Finance Wise Accounting

2026/27

CGT — Standard

CGT — Standard — bands and rates
Band	Rate	Notes
Up to £37,700	18%	Basic-rate band
Over £37,700	24%	Above basic-rate band

Annual exempt amount£3,000

CGT — Residential property

CGT — Residential property — bands and rates
Band	Rate
Up to £37,700	18%
Over £37,700	24%

2025/26

CGT — Standard

CGT — Standard — bands and rates
Band	Rate
Up to £37,700	18%
Over £37,700	24%

Annual exempt amount£3,000

Capital Gains Tax (CGT) basics

CGT is charged when you dispose of an asset — shares, a second property, a business — for more than it cost. You have an annual exempt amount, and gains above it are taxed at rates that depend on the asset and your income. Residential property disposals must be reported and the tax paid within 60 days.

Reliefs such as Business Asset Disposal Relief can cut the rate significantly. We calculate gains, claim every relief and file on time.

The annual exempt amount

Everyone has an annual exempt amount — a slice of gains each year that is free of capital gains tax. It cannot be carried forward, so an unused one is simply lost on 5 April, and it is per person, which is what makes the timing and the ownership of a disposal worth thinking about before it happens rather than after.

Two consequences follow. Splitting a disposal across two tax years can use two years of exemption. And transferring an asset to a spouse or civil partner before a sale is treated as no gain and no loss, which can bring a second exemption and a lower rate band into play. Both have to be done before the sale, and the second one has to be a genuine transfer of ownership.

The 60-day rule on property

A gain on UK residential property has to be reported and the tax paid within 60 days of completion, separately from the annual return. Penalties are automatic. This catches people who assume everything happens through self-assessment, and it catches them after the money has already been spent.

If the property was ever your main home, the period you lived there reduces the gain, and there is a further relieved period at the end of ownership. That calculation is worth doing before accepting an offer, because it decides whether there is anything to report at all.

Frequently asked

When do I report a property sale?+

A UK residential property gain must be reported and the CGT paid within 60 days of completion. Missing this triggers automatic penalties.

Is there a tax-free amount?+

Yes — the annual exempt amount. Gains within it are tax-free; only the excess is taxed. See the table above for the current figure.

What is the annual exempt amount?+

The amount of gains you can make each tax year before capital gains tax applies. It is per person, it cannot be carried forward, and an unused one is lost at the end of the tax year — which is why splitting a disposal across two years, or transferring part of an asset to a spouse first, can save real money if it is arranged before the sale.

When do I have to pay capital gains tax?+

For UK residential property, within 60 days of completion, on a separate return — penalties for missing it are automatic. For other assets it goes through self-assessment and is due by the 31 January after the tax year.

Can I use pension contributions to reduce CGT?+

Indirectly, yes. A personal pension contribution extends your basic-rate band, and since the CGT rate depends on which band the gain falls into, extending the band can move part of the gain to the lower rate. It has to be paid in the same tax year as the disposal.