What is the UK Capital Gains Tax?
Capital Gains Tax applies when you sell an asset for more than you paid. The annual exempt amount has been cut sharply to just £3,000, so far more people now owe CGT than a few years ago.
Rates are 18% within your remaining basic-rate band and 24% above it. Your other income determines how much basic-rate band is left, so CGT is effectively stacked on top of income.
Formula & worked example
Taxable gain = Gain − £3,000 exemption
Tax = 18% within remaining basic band + 24% above
Worked example: selling shares for £60,000 bought at £32,000 with £1,200 of costs gives a £26,800 gain. Less the £3,000 exemption leaves £23,800 taxable. With £45,000 of other income, only £5,270 of basic band remains, so £5,270 is taxed at 18% and £18,530 at 24% → £5,396.
How to use this uk capital gains tax calculator
- Enter sale proceeds and original purchase cost.
- Allowable costs include broker fees, legal fees and improvement costs on property.
- Enter your other taxable income — it determines which CGT rate applies.
- Your main home is normally exempt under Private Residence Relief.
Smart tips
- Use the £3,000 exemption every year — it does not carry forward. Realising small gains annually is free.
- Transfers between spouses are tax-free, effectively doubling the household exemption to £6,000.
- Hold investments in an ISA or pension and CGT never applies at all.
- Capital losses can be offset against gains and carried forward indefinitely if reported within four years.
- Residential property CGT must be reported and paid within 60 days of completion.
Frequently asked questions
What is the CGT annual exempt amount?
£3,000 for 2026, reduced from £12,300 in 2022-23. It cannot be carried forward if unused.
What are the UK CGT rates?
18% within your remaining basic-rate band and 24% above it, for both shares and residential property.
Do I pay CGT on my home?
Normally no, thanks to Private Residence Relief, provided it has been your only or main residence throughout ownership.
How do I reduce Capital Gains Tax?
Use your annual exemption each year, transfer assets to a spouse, hold investments in ISAs or pensions, and offset any capital losses.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: GOV.UK — Capital Gains Tax allowances and rates. How we check these numbers.