Capital Gains Tax Calculator UK 2025/26

What Is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax on the profit you make when you sell or dispose of an asset that has increased in value. You are taxed on the gain — the difference between what you paid for the asset (or its value at the time you acquired it) and what you received when you sold it — not the total sale proceeds.

CGT applies to a wide range of assets including residential property (that is not your main home), shares and investment funds, business assets, cryptocurrency, valuable personal possessions worth more than £6,000, and more. It does not apply to your main home (thanks to Private Residence Relief), cars, ISA investments, or UK government gilts.

The tax is calculated on the net gains made in a tax year, after deducting any capital losses and the annual exempt amount. Unlike income tax, CGT rates depend on whether you are a basic or higher-rate taxpayer when the gain is added to your other taxable income.

Capital Gains Tax Rates 2025/26

CGT rates for 2025/26 depend on both the type of asset and whether you are a basic or higher-rate taxpayer. The rates that apply are determined by adding your taxable capital gain to your other taxable income and seeing which income tax band the total falls into.

If a gain straddles the basic and higher rate bands — for example if your income is just below £50,270 and the gain pushes the total above it — the portion of the gain within the basic rate band is taxed at the lower rate, and the remainder at the higher rate. Our calculator handles this split automatically.

The Annual Exempt Amount

Every individual receives an annual CGT exempt amount — a threshold of gains below which no CGT is payable. For 2025/26, this is £3,000.

This has been reduced dramatically in recent years: it was £12,300 in 2022/23, cut to £6,000 in 2023/24, and then to £3,000 in 2024/25 where it remains for 2025/26. This reduction has brought many more people into the CGT net, particularly investors who previously relied on the generous allowance to shelter gains from ISA and portfolio rebalancing.

The annual exempt amount is per person and cannot be transferred between spouses (though each spouse has their own allowance). It also cannot be carried forward if unused — use it or lose it each tax year.

Married couples and civil partners can transfer assets between themselves at no CGT cost, effectively doubling the allowance available when selling jointly-owned assets. This is a key tax planning strategy for couples with significant investments.

CGT on Residential Property

Residential property — specifically buy-to-let properties, second homes, and inherited properties you have not lived in — is subject to higher CGT rates than other assets. For 2025/26, the rates are 18% (basic rate) and 24% (higher rate).

Your main home is usually fully exempt from CGT under Private Residence Relief (PRR), provided you have lived in it throughout your ownership as your only or main residence. If you have let the property, worked from part of it, or had periods of absence (other than certain qualifying absences), partial CGT may apply.

If you sell a residential property that is not your main home, you must report the gain and pay any CGT due within 60 days of the completion date (not the exchange date). This is a strict deadline and HMRC charges automatic penalties for late submission.

Key allowable deductions when calculating the gain on a property include:

• The original purchase price (plus Stamp Duty Land Tax paid at purchase)
• Solicitor and estate agent fees at purchase and sale
• Capital improvements (not repairs or maintenance)
• Mortgage arrangement fees (in some cases)

CGT on Shares and Investments

CGT on shares and investment funds is charged at 10% (basic rate) or 20% (higher rate) on gains above the £3,000 annual exempt amount. Gains within an ISA are completely exempt from CGT, making ISAs the most tax-efficient wrapper for long-term investing.

When calculating the gain on shares, HMRC uses a share matching system. Shares are matched in a specific order: same-day acquisitions first, then shares bought within the next 30 days, then shares in the “Section 104 pool” (an average cost of remaining shares). This prevents “bed and breakfasting” — selling shares and immediately rebuying them to crystallise a gain and reset the base cost.

Dividend reinvestment plans (DRIPs), stock splits, and bonus shares can all affect the base cost and CGT calculation. If you have a complex share history, consider using an accountant or HMRC's Capital Gains Tax real time service to confirm your calculation.

CGT on Business Assets (Business Asset Disposal Relief)

Business Asset Disposal Relief (BADR) — formerly known as Entrepreneurs' Relief — reduces the CGT rate to 14% on qualifying disposals of business assets for 2025/26 (rising to 18% from April 2026). There is a lifetime limit of £1 million of qualifying gains.

To qualify for BADR on shares in a personal company, you must have:

• Owned at least 5% of the shares and voting rights for at least 2 years
• Been an officer or employee of the company for at least 2 years
• The company must be a trading company (not an investment holding company)

BADR also applies to the disposal of a sole trader or partnership business (or an interest in a partnership), and to disposals of assets used in a business that is also being disposed of. Associated disposal rules allow assets you personally own but lend to your company or partnership to qualify in some circumstances.

Given the significant tax saving available, it is worth taking specialist advice before any business sale to ensure the conditions are met and the relief is claimed correctly. The 2-year ownership and officer conditions must be met continuously in the period immediately before disposal.

How to Reduce Your Capital Gains Tax Bill

There are several legitimate strategies to reduce or defer CGT:

1. Use your annual exempt amount: Crystallise gains of up to £3,000 per year tax-free. Do not waste this allowance.
2. Maximise ISA contributions: Move investments into your ISA over time using “Bed and ISA” — selling outside the ISA and rebuying inside. Any future gains are ISA-exempt.
3. Use your spouse's allowance: Transfer assets to your spouse before selling so both annual exempt amounts are used. You each pay CGT at your own marginal rate.
4. Offset losses: Realise capital losses in the same year to offset gains. Losses can be carried forward indefinitely if not fully used.
5. Time your disposal: If you are at the higher rate threshold, consider delaying a sale until the new tax year, or structuring a sale to straddle two tax years using exchange and completion in different years (property only).
6. Pension contributions: Making a pension contribution reduces your adjusted net income, which can drop you into the basic rate band and reduce your CGT rate.
7. Gift Aid donations: Extend your basic rate band, similar effect to pension contributions.
8. Business Asset Disposal Relief: Ensure you qualify before any business sale — the saving can be hundreds of thousands of pounds.

Reporting and Paying Capital Gains Tax

The process for reporting and paying CGT depends on the type of asset:

UK residential property: You must report and pay CGT within 60 days of completion using HMRC's online service (previously 30 days, extended to 60 days from October 2021). This applies even if you are not otherwise registered for Self Assessment. Late reporting triggers automatic penalties of £100 immediately, rising to £300 or 5% of tax owed after 6 months, and further penalties after 12 months.

All other assets: Report gains through your Self Assessment tax return for the relevant tax year. You must complete a Self Assessment return if your gains exceed the annual exempt amount, or if total proceeds exceed four times the exempt amount (£12,000 for 2025/26). Tax is due by 31 January following the end of the tax year (so 31 January 2027 for gains made in 2025/26).

If you are not registered for Self Assessment and only need to report a non-property gain, you can use HMRC's real-time CGT service instead of completing a full return.

Keep records of all your asset purchases and sales, including original costs, improvement costs, professional fees, and dates of acquisition and disposal. HMRC can investigate CGT returns up to 4 years after the end of the tax year (or longer if fraud is suspected).