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Summary
Capital Gains Tax (CGT) is charged on the profit when you sell or dispose of an asset that has increased in value. In the UK, you receive an annual tax-free allowance (£3,000 for 2025-26), and gains above this are taxed at 18% (basic rate) or 24% (higher rate). Different rates and reliefs apply depending on the type of asset and your total income.
How it works
The basic calculation
Taxable gain = Disposal proceeds - Acquisition cost - Allowable costs - Annual exemption
Allowable costs include:
- Purchase price of the asset
- Transaction costs (stamp duty, solicitor fees, broker fees)
- Improvement costs (for property, not maintenance)
- Indexation allowance (for assets held by companies)
CGT rates (2025-26)
| Asset type | Basic rate | Higher rate |
|---|---|---|
| Most assets (shares, crypto, etc.) | 18% | 24% |
| Residential property (not main home) | 18% | 24% |
| Business Asset Disposal Relief (BADR) | 14% (rising to 18% from 2026) | 14% |
| Investors’ Relief | 10% | 10% |
The rate depends on your total taxable income. Gains are added on top of income, so if your income uses up the basic rate band (£37,700 above the personal allowance), all gains are taxed at the higher rate.
Annual exemption
Each individual receives a £3,000 annual exemption (2025-26). Only gains exceeding this amount are taxable. The exemption cannot be carried forward.
Main residence relief
If the property is your only or main home, Private Residence Relief means you pay no CGT on the gain. Partial relief applies if the property was your main home for only part of the ownership period, or if part was used exclusively for business.
Worked example
Selling shares: bought for £20,000, sold for £45,000. Salary: £55,000
- Gain: £45,000 - £20,000 = £25,000
- Annual exemption: £3,000
- Taxable gain: £25,000 - £3,000 = £22,000
- Basic rate band remaining: £50,270 - £55,000 = none (salary exceeds basic rate)
- All gain taxed at higher rate: £22,000 x 24% = £5,280
If salary were £40,000:
- Basic rate band remaining: £50,270 - £40,000 = £10,270
- First £10,270 of gain at 18%: £1,849
- Remaining £11,730 at 24%: £2,815
- Total CGT: £4,664
Inputs explained
- Sale price — what you sold the asset for
- Purchase price — what you originally paid
- Allowable costs — transaction fees and improvement costs
- Annual income — to determine which CGT rate band applies
- Asset type — shares, property, business assets, etc.
Outputs explained
- Total gain — the profit on the disposal
- Taxable gain — after deducting annual exemption and any reliefs
- CGT due — the tax payable
- Effective rate — CGT as a percentage of the total gain
Assumptions & limitations
- Losses can be offset against gains in the same year, or carried forward to future years. Losses must be reported to HMRC.
- Transfers between spouses/civil partners are tax-free (no gain, no loss).
- Assets held in an ISA or pension are exempt from CGT.
- Bed and ISA (selling and immediately rebuying in an ISA) can crystallise gains to use the annual exemption.
- CGT on UK residential property must be reported and paid within 60 days of completion.
- The calculator uses a single disposal. Multiple disposals in one year share the same annual exemption.