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EnEnPrefer a visual walkthrough? Watch our step-by-step video guide to see exactly how to calculate capital gains tax, understand deductions, and interpret your results using the CGT calculator.
Capital Gains Tax (CGT) is the tax you pay on the profit you make when you sell or dispose of an asset that has increased in value. It is not charged on the total sale price, only on the gain after allowable costs and reliefs.
CGT usually applies when you sell or dispose of assets such as:
For the 2024/25 tax year, most individuals can use a £3,000 annual CGT allowance, meaning gains up to this amount are tax-free.
Some assets are exempt from HMRC capital gains, including your main home under Private Residence Relief, assets held in ISAs or pensions, cars, UK government gilts, gifts to a spouse or civil partner, and personal possessions under £6,000.
Understanding the current capital gains tax rates UK is essential before you calculate your liability. CGT rates depend on your total taxable income and the type of asset you sell.
| Asset Type | Basic Rate Taxpayer | Higher / Additional Rate |
|---|---|---|
| Residential Property | 18% | 24% |
| Other Assets (shares, crypto, etc.) | 10% | 20% |
Important note: The annual tax-free allowance was reduced from £6,000 to £3,000 in the 2024/25 tax year. Always use current rates when using a CGT calculator or filing your return.
Gain = Sale Price – (Purchase Price + Costs)
Deduct legal fees, estate agent fees, stamp duty, improvement costs, and disposal fees to reduce taxable gains.
Apply the £3,000 CGT allowance for the 2024/25 tax year.
The remaining gain is taxed based on your income band and asset type.
If you sell a property for £250,000 that you bought for £180,000 and incur £10,000 in costs, your gain is £60,000. After deducting the CGT allowance, tax is applied at the relevant rate.
If you sell UK residential property that is not your main home, you must report and pay CGT within 60 days of completion. This applies to property sales completed after 27 October 2021.
For other assets such as shares, cryptocurrency, or business assets, CGT is reported through your Self Assessment tax return. You must register by 5 October following the tax year of disposal and pay any CGT owed by 31 January.
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