Capital Gains Tax UK: Rates, Allowances, and How to Calculate
Capital Gains Tax (CGT) is the tax you pay on profit when you sell (or "dispose of") an asset that has increased in value. In the UK, CGT applies to shares, property (other than your main home), cryptocurrency, and other valuable assets.
For 2024-25, the Annual Exempt Amount (AEA) is just £3,000 — down from £12,300 two years ago. Basic-rate taxpayers pay 10% on gains (18% on residential property), while higher and additional-rate taxpayers pay 20% (24% on residential property).
You can reduce your CGT bill by using your annual allowance, transferring assets to a spouse (who has their own £3,000 AEA), holding investments in ISAs or pensions, and offsetting losses against gains. Keeping good records of purchase prices is essential — HMRC expects you to report gains through Self Assessment.
Frequently Asked Questions
Do I pay CGT on my main home?
No. Your principal private residence is exempt from CGT through Private Residence Relief. However, if you let part of it out or it was not your main home for the entire ownership period, a partial charge may apply.
Can I offset losses against gains?
Yes. Capital losses can be offset against gains in the same tax year. Unused losses can be carried forward indefinitely, but must be reported to HMRC within 4 years of the end of the tax year in which the loss occurred.
How do I report capital gains?
If your total gains exceed the AEA (or total proceeds exceed 4 times the AEA), you must report through Self Assessment. Residential property disposals must be reported within 60 days via the CGT property disposal service.
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