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? 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.