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 fallen sharply — from £12,300 to £3,000 — so many more people now pay CGT.
The rate depends on your income: gains falling within your remaining basic rate band are taxed at 18%, and anything above at 24%. Your main home is normally exempt through Private Residence Relief.
Formula & worked example
Tax = 18% within remaining basic band, 24% above
Worked example: a £25,000 gain with £45,000 of income. After the £3,000 exemption, £22,000 is taxable. About £5,270 of basic rate band remains, taxed at 18%, with the balance at 24% — giving CGT of roughly £5,000.
How to use this uk capital gains tax calculator
- Enter your total gain after deducting acquisition cost and allowable expenses.
- Enter your taxable income to determine the band split.
- Choose the asset type.
- Adjust the exempt amount if it changes.
Smart tips
- Use the exemption every year — it cannot be carried forward. Selling in tranches across tax years can save meaningfully.
- Transfers between spouses are tax-free, effectively doubling the available exemption for a couple.
- Hold investments in an ISA or pension and CGT does not apply at all.
- Capital losses can be offset against gains and carried forward indefinitely if reported.
- Residential property gains must be reported and paid within 60 days of completion.
Frequently asked questions
What is the CGT annual exempt amount?
Currently £3,000, down from £12,300 in recent years. Gains above this are taxable.
What are the CGT rates?
18% for gains within your remaining basic rate band and 24% above it, for both property and other assets.
Do I pay CGT on my home?
Normally no. Private Residence Relief exempts your main home, though restrictions apply if you let it out or it has large grounds.
How do I reduce CGT?
Use the annual exemption each year, transfer assets to a spouse, hold investments in ISAs or pensions, and offset reported capital losses.
Want the theory behind the numbers? Read our UK tax guides on the Money Blog.