Capital gains tax (CGT) is charged on the profit you make when you sell or give away an asset that has gone up in value, such as shares or a second property. For 2026/27 the first £3,000 of gains is tax-free, and the rest is taxed at 18% or 24% depending on your other income.
What counts as a gain
The gain is the amount you received, or the market value if you gave the asset away, minus what you paid and the costs that are allowed. Allowable costs normally include fees to buy and sell (legal, estate agent or broker fees) and the cost of improvements that add value, but not routine repairs or maintenance.
Only the profit is taxed, and only when you dispose of the asset. A rise in value on paper is not a gain until you sell. Your main home is normally covered by Private Residence Relief, so the tax mostly affects second homes, buy-to-let property, shares held outside an ISA and some other assets.
The 2026/27 allowance and rates
- Annual exempt amount: £3,000 for 2026/27. It is per person and cannot be carried forward.
- Basic-rate taxpayers: 18% on gains that fit inside the unused part of their basic-rate band (£37,700 in 2026/27), and 24% on the part above it.
- Higher and additional-rate taxpayers: 24% on all gains.
- Trustees and personal representatives: 24%.
These rates apply to shares and residential property alike. They changed on 30 October 2024; before that, shares and other assets were taxed at 10% and 20% and residential property at 18% and 24%. Business Asset Disposal Relief, for qualifying business sales, is taxed at 18% for disposals from 6 April 2026. This is a separate relief with its own conditions, so check GOV.UK.
How your income decides the rate
HMRC adds your gain on top of your taxable income. Your taxable income is your income minus the Personal Allowance. Whatever is left of the £37,700 basic-rate band after that income is available to the gain at 18%, and the rest is at 24%.
So a person on a modest salary can pay a mix of both rates, while someone already in the higher-rate band pays 24% throughout.
Worked example
You sell shares for £60,000 that cost £30,000, with £1,500 of dealing and other allowable costs. Your other income is £40,000.
- Gain: £60,000 − £30,000 − £1,500 = £28,500
- After the £3,000 exempt amount: £25,500 taxable
- Taxable income is £40,000 − £12,570 = £27,430, so £10,270 of the basic-rate band is left
- £10,270 at 18% = £1,848.60; the remaining £15,230 at 24% = £3,655.20
- Total CGT: £5,503.80, about 19.3% of the gain
On a £80,000 income, the whole £25,500 would be taxed at 24%, giving £6,120.00. The same gain costs more because there is no basic-rate band left.
Losses
A loss on a disposal can be set against gains. Losses brought forward from earlier years are used only to bring this year’s gain down to the exempt amount, so none is wasted. In the example above, £6,000 of losses brought forward would cut the tax to £4,063.80. Losses must be reported to HMRC to be carried forward. Check GOV.UK for how.
Reporting and paying
Most UK residential property sales have to be reported and paid within 60 days of completion, rather than waiting for the tax return. Gains on shares and other assets are normally reported through Self Assessment. Deadlines and who must report can change, so check GOV.UK for your case.
Reliefs the calculator does not cover
Private Residence Relief gives relief on your own home, and the final 9 months of ownership always qualify. Letting relief applies only where you shared your home with a tenant or lodger, and is limited to the lowest of the residence relief amount, £40,000 and the gain from letting. Other reliefs and non-resident rules also exist. Our tool ignores these, so it can overstate the tax on a home that was partly your residence. See UK income tax explained: bands, allowance and how it's worked out for how your income and allowance work, and Stamp Duty, LBTT and LTT explained for the tax on buying a property.
Note: This is general information, not tax advice. Rates and allowances change, so check GOV.UK or speak to an adviser for your own situation.
Try the calculator
Use the Capital gains tax calculator to enter your sale price, costs, income and losses and see the tax at each rate. Pair it with the Dividend tax calculator if you also receive dividends.
Open the free Capital gains tax calculator
Worked example 2: how income changes the bill
The same gain can cost very different amounts depending on your other income. Here is a second set of figures, computed with the capital gains tax calculator’s engine. You sell shares for £45,000 that cost £20,000, with £500 of allowable costs. The gain is £24,500 and, after the £3,000 exempt amount, £21,500 is taxable.
| Other income | Basic-rate band left | Tax at 18% | Tax at 24% | Total CGT |
|---|---|---|---|---|
| £20,000 | £30,270 | £3,870.00 | £0.00 | £3,870.00 |
| £60,000 | £0 | £0.00 | £5,160.00 | £5,160.00 |
With £20,000 of income, taxable income is £7,430 after the Personal Allowance, which leaves £30,270 of the £37,700 band, enough to take the whole gain at 18%. With £60,000, you are already in the higher-rate band, so every pound of gain is taxed at 24%. The £1,290 difference comes from your income, not from the shares. If you can choose when to sell, spreading a large gain across two tax years lets you use two exempt amounts and may keep more of it in the basic-rate band. The tax year runs from 6 April to 5 April, so sales on either side of that date fall in different years.
Step-by-step: how to work out your CGT
- Find the gain. Sale proceeds (or market value for a gift) less purchase price less allowable costs.
- Deduct losses. Use this year’s losses first, then losses brought forward only as far as needed to reach the exempt amount.
- Deduct the £3,000 exempt amount. If the gain is smaller, no tax is due.
- Work out your taxable income. Total income less the Personal Allowance, which can be reduced above £100,000.
- Fill the basic-rate band. Subtract taxable income from £37,700. Any remaining space takes 18%.
- Apply 24% to the rest and add the two amounts.
Gifts, spouses and bed-and-ISA
You can be charged CGT on a gift as if you had sold it at market value, with some exceptions. Transfers between spouses or civil partners who live together are normally made at no gain and no loss, which lets a couple make use of two exempt amounts and two basic-rate bands on a sale. This can matter if one partner has little other income. Moving investments into an ISA by selling them and rebuying inside the wrapper (sometimes called a bed-and-ISA) can trigger a gain on the sale, but future growth inside the ISA is free of CGT. For how an inherited asset is valued, see Inheritance tax explained: bands, gifts and how much your estate could pay. The rules on same-day and 30-day matching for shares are detailed, so check GOV.UK before you rebuy something you have just sold.
Common mistakes
- Forgetting costs. Legal fees, broker fees and the cost of improvements reduce the gain.
- Ignoring the reporting deadline. UK residential property sales usually need reporting and paying within 60 days of completion.
- Assuming your home is always exempt. Private Residence Relief has conditions, and it can be reduced if you let the property or did not live in it throughout.
- Missing losses. An unreported loss cannot be carried forward later, so report it.
- Mixing up dividends and gains. Dividends are income tax, not CGT. See Dividend tax explained: rates, allowance and a worked example.
When to check with a professional or official source
Seek advice for any sale involving a business, a property partly let out, a non-UK resident, trusts, shares in your employer or a large gain. GOV.UK has the current rates and the forms. An accountant can also help if you need to pay by Self Assessment and want to plan around the exempt amount.
Frequently asked questions
Is the annual exempt amount per person?
Yes. Each person has their own £3,000 for 2026/27, so two joint owners can each use theirs. It cannot be carried forward if unused.
Are shares and property taxed at the same rate?
Since 30 October 2024 the CGT rates are the same for shares and residential property: 18% and 24%. Residential property gains still have a shorter reporting deadline.
Does Scotland have different CGT rates?
No. Capital gains tax rates are the same across the UK. Scottish income tax bands differ, which can change how much of your basic-rate band is left, and that tool does not model it.
Can I use losses against other income?
Capital losses are set against capital gains, not against income. Check GOV.UK for the exact rules before relying on them.
Do I pay CGT on shares inside an ISA?
No. Gains on investments held in a stocks and shares ISA are free of capital gains tax, and so are dividends and interest.
Is there CGT on my main home?
Usually not, because of Private Residence Relief, but conditions apply, for example if part of the home was used for business or let out. Check GOV.UK.
What happens if my gain is below £3,000?
No CGT is due on that gain, though you may still need to report a disposal in some cases, such as when total proceeds are high. Check GOV.UK for the thresholds.
Can I use my spouse's exempt amount?
Each person has their own. You cannot use your spouse’s unused amount, but you can transfer assets between you before a sale so both exempt amounts are used.