Capital Gains Tax can arise when you sell, transfer, exchange or give away an asset that has increased in value. It commonly affects landlords selling rental properties, investors disposing of shares, business owners selling company interests and individuals transferring valuable assets.

The tax is charged on the gain rather than the full amount received. However, calculating that gain correctly can involve acquisition costs, improvement expenditure, ownership history, previous losses and available tax reliefs.

This guide explains how Capital Gains Tax works during the 2026/27 tax year and when professional support from Tax Consultant may be valuable.

What Is Capital Gains Tax?

Capital Gains Tax, usually shortened to CGT, is a tax on the profit made when a chargeable asset is disposed of.

A disposal can include:

Selling an asset
Giving an asset away
Exchanging one asset for another
Transferring ownership
Receiving compensation for a lost or destroyed asset
Using cryptocurrency to purchase something

For example, if you purchase an investment property for £180,000 and later sell it for £240,000, the initial gain is £60,000. Allowable purchase, sale and improvement costs may then reduce the taxable gain.

Which Assets Can Be Subject to Capital Gains Tax?

Capital Gains Tax can apply to many different assets, including:

Second homes and rental properties
Commercial property and land
Shares held outside an ISA
Business assets
Interests in a partnership
Valuable personal possessions
Cryptocurrency and other digital assets
Overseas property and investments

Certain assets are generally exempt. These can include investments held within an ISA, UK government gilts, Premium Bonds and qualifying gifts to charity.

Selling your main home may also be exempt through Private Residence Relief, although this depends on how the property was occupied and used.

Capital Gains Tax Allowance for 2026/27

The annual exempt amount for most individuals is £3,000 for the 2026/27 tax year. Most trusts receive an allowance of £1,500.

The allowance applies to your total net gains for the tax year, not separately to every asset. It cannot normally be carried forward if it is unused.

HMRC confirms the current figures in its Capital Gains Tax allowance guidance.

Capital Gains Tax Rates for 2026/27

Individuals generally pay Capital Gains Tax at either 18% or 24% on taxable gains made from 6 April 2026.

The applicable rate depends on your taxable income and the size of the gain. Any portion of the taxable gain falling within your unused basic-rate band is generally charged at 18%. The remaining amount is usually charged at 24%.

The gain is added to taxable income when determining which rate applies. A person who pays basic-rate Income Tax could therefore pay Capital Gains Tax partly at 18% and partly at 24%.

Current rates and calculation examples are available in HMRC’s Capital Gains Tax rates guidance.

How Is a Capital Gain Calculated?

The starting point is normally the sale proceeds or market value of the asset. From this figure, you may be able to deduct:

The original acquisition price
Stamp Duty Land Tax paid on a property purchase
Solicitor and conveyancing fees
Estate-agent or advertising fees
Professional valuation costs
Certain capital improvement expenses
Costs directly connected with acquiring or disposing of the asset

Normal repairs and maintenance are not usually treated as capital improvements. Financing costs, such as mortgage interest, are also not generally deducted when calculating the gain.

Where an asset was inherited or received as a gift, a market value may need to be established for the relevant date.

Capital Gains Tax on Property

Property disposals are among the most common causes of CGT liabilities. Tax may be due when selling a:

Buy-to-let property
Holiday home
Second residence
Commercial property
Piece of land
Property inherited and later sold

The calculation may become complicated if the property was jointly owned, rented for only part of the ownership period or previously used as the owner’s main residence.

Major improvements may reduce the gain if the expenditure qualifies and remains reflected in the property at the date of sale. General decorating and repairs are normally treated differently.

The 60-Day Property Reporting Rule

UK residents who sell UK residential property and have Capital Gains Tax to pay must generally report the disposal and pay an estimate of the tax within 60 days of completion.

If the taxpayer is already registered for Self Assessment, details of the sale may also need to be included in the relevant annual tax return.

Missing the 60-day deadline can result in penalties and interest. HMRC provides an online Capital Gains Tax on UK property service.

Because the deadline begins from completion rather than the end of the tax year, advice should be obtained immediately after a property sale.

Private Residence Relief

Private Residence Relief can protect some or all of the gain when an individual sells their only or main home.

Full relief may be available where the property has been the owner’s genuine main residence throughout the qualifying ownership period. The calculation may change when the property:

Was let to tenants
Was used for business
Was unoccupied for extended periods
Was only one of several homes
Included land exceeding the normally permitted area
Was occupied as the main residence for only part of the ownership period

A temporary or artificial period of occupation does not necessarily establish a property as a genuine main residence. The facts and quality of occupation must be considered.

Capital Gains Tax on Shares

Selling shares outside an ISA may create a taxable gain. The calculation can be difficult when shares in the same company were purchased at different times and prices.

UK share-matching rules determine which acquisition costs are used against the disposal. These include specific rules for shares purchased on the same day, shares acquired within the following 30 days and shares held within a pooled holding.

Dividends are taxed separately from capital gains. Receiving dividend income does not normally create a capital disposal, while selling the shares may create a gain or loss.

Capital Gains Tax on Cryptocurrency

Selling or exchanging cryptocurrency may be treated as a disposal for Capital Gains Tax purposes.

A taxable event can arise when cryptoassets are:

Sold for pounds or another currency
Exchanged for another token
Used to purchase goods or services
Given to someone other than a spouse, civil partner or qualifying charity

Exchanging one cryptocurrency for another can create a disposal even if no money enters a bank account.

Taxpayers should maintain records of transaction dates, quantities, sterling values, exchange fees and wallet transfers. Relying only on the current balance of an exchange account will not usually provide enough information for an accurate calculation.

Gifts and Family Transfers

Giving an asset away can still create a taxable gain. If no payment is received, HMRC may use the asset’s market value when calculating the disposal.

Transfers between spouses or civil partners who are living together are generally made on a no-gain, no-loss basis. However, the receiving spouse normally takes over the original base cost, meaning the deferred gain may arise when they later sell the asset.

Different time limits and rules can apply when spouses or civil partners separate.

Gift Hold-Over Relief may sometimes defer Capital Gains Tax on qualifying business assets or certain other transfers. Specialist advice should be taken before valuable assets are gifted.

Using Capital Losses

Allowable losses can be deducted from chargeable gains. If losses exceed gains during the tax year, the unused amount may be carried forward after being properly reported to HMRC.

Losses cannot normally be used against employment or rental income. Restrictions may also apply to losses from transactions between connected people.

Recording a loss can remain valuable even when no tax is currently due because it may reduce Capital Gains Tax on a future disposal.

Business Asset Disposal Relief

Business Asset Disposal Relief may apply when a sole trader, business partner or qualifying shareholder sells all or part of a business.

For qualifying disposals from 6 April 2026, eligible gains are charged at 18%. The relief has strict conditions relating to ownership periods, employment, shareholdings and the trading status of the company.

Business owners should review eligibility before agreeing to a sale. Once the disposal has been completed, it may be too late to correct a failed ownership or trading condition.

Common Capital Gains Tax Mistakes

Frequent CGT mistakes include:

Assuming every main-home sale is fully exempt
Missing the 60-day property deadline
Using the wrong property acquisition value
Claiming ordinary repairs as capital improvements
Failing to report cryptocurrency exchanges
Forgetting gains made through overseas platforms
Ignoring previous capital losses
Applying the annual exempt amount to each asset separately
Failing to keep purchase and disposal documents
Assuming a gift cannot create a taxable gain

These errors can lead to underpaid tax, penalties, interest or an HMRC enquiry.

How Tax Consultant Can Help

Capital Gains Tax calculations require more than entering the purchase and sale prices into a calculator. The ownership history, taxpayer’s income, available losses and relevant reliefs must all be considered.

Tax Consultant can assist with:

Property and investment gain calculations
Private Residence Relief reviews
UK property disposal returns
Share and cryptocurrency calculations
Capital loss claims
Business Asset Disposal Relief
Gift and family-transfer planning
Self Assessment reporting
Overdue or incorrect CGT disclosures
Responses to HMRC enquiries
Tax planning before an asset is sold

Early advice can help you understand the likely liability, preserve the necessary evidence and avoid missing a short reporting deadline.

For professional Capital Gains Tax support, visit taxconsultant.co.uk and speak with an experienced UK tax adviser.

Frequently Asked Questions
1. What is the Capital Gains Tax allowance for 2026/27?

The annual exempt amount is £3,000 for most individuals. CGT is generally charged on total net taxable gains exceeding this allowance.

2. What are the current Capital Gains Tax rates?

For individuals, gains made from 6 April 2026 are generally taxed at 18% or 24%. The applicable rate depends on taxable income and the amount of the gain.

3. Do I pay Capital Gains Tax when selling my home?

You may qualify for Private Residence Relief if the property was your genuine main residence. Letting, business use or periods of absence can reduce the relief available.

4. How quickly must I report a property gain?

Where Capital Gains Tax is due on a UK residential property disposal, it must normally be reported and paid within 60 days of completion.

5. Can an accountant reduce my Capital Gains Tax bill?

A tax adviser can ensure that allowable costs, capital losses, exemptions and qualifying reliefs are correctly included. Any reduction must be supported by the facts and comply with UK tax legislation.