What is Capital Gains Tax (CGT)?▾
It's a tax on the profit when you sell something that's gone up in value — not the full sale price, just the gain. Sold shares you bought for £10,000 at £25,000? The gain is £15,000, and that's what gets taxed.
What is the CGT annual exempt amount for 2026/27?▾
Just £3,000 per person, unchanged from 2025/26. It's been slashed over the past few years — it was £12,300 as recently as 2022/23, then £6,000, and now £3,000. That means almost any meaningful disposal will trigger a CGT bill. If you're married or in a civil partnership, you each get your own £3,000 allowance, so transferring assets between you before selling can double the relief.
What are the CGT rates for 2026/27?▾
18% at the basic rate and 24% at the higher or additional rate — both unchanged for 2026/27. Since 30 October 2024 those main rates apply to every asset class, not just residential property — shares, crypto and other assets were previously taxed at 10% and 20%, and those older rates now only apply to disposals made before that date. Business Asset Disposal Relief gives a flat 18% on disposals from 6 April 2026, up from 14% in 2025/26, on gains up to a £1,000,000 lifetime limit. Which rate you pay depends on where the gain sits in your income tax bands — so your salary pushes the gain into higher rate territory.
How is CGT calculated on property?▾
Here's how it works. Take the sale price, subtract what you paid, subtract improvement costs (extensions, loft conversions — not new carpets), subtract selling costs (estate agent, solicitor), and you've got the gain. Then knock off your £3,000 annual exemption and any losses you're carrying forward. What's left is taxed at 18% or 24%. One thing people forget: you have to report and pay within 60 days of completion, not at the end of the tax year.
What is Business Asset Disposal Relief (BADR)?▾
It used to be called Entrepreneurs' Relief. If you are selling all or part of a qualifying business, or shares in your personal trading company, you can pay 18% CGT instead of the normal rates. The BADR rate has been stepped up on a pre-announced path: 10% up to 5 April 2025, 14% through 2025/26, and 18% for disposals on or after 6 April 2026 — which now matches the main basic CGT rate, so BADR only saves higher rate taxpayers money. There is a £1,000,000 lifetime cap on gains that qualify, and you need to have held the business or shares for at least two years.
Do I pay CGT on cryptocurrency?▾
Yes. HMRC treats crypto like any other asset. Selling, swapping one token for another, or spending crypto all count as disposals. The rates are the same as shares: 18% or 24%. Mining and staking rewards are treated as income instead. And HMRC has data-sharing agreements with UK exchanges, so don't assume they won't notice.
Can I offset losses against capital gains?▾
Yes, and you should. Losses from the same tax year are deducted automatically. Unused losses carry forward indefinitely — but you have to report them to HMRC within 4 years of the tax year they happened, otherwise you lose them. If you're sitting on underperforming investments, selling at a loss before 5 April to "bank" the loss can be a legitimate tax planning strategy.
When do I need to pay CGT?▾
It depends on the asset. For residential property, you've got 60 days from completion to report and pay using HMRC's UK Property CGT service. For everything else — shares, crypto, business assets — it goes on your self-assessment return and is due by 31 January following the end of the tax year.
Is there CGT on my main home?▾
No — your main home is exempt under Private Residence Relief. But there are exceptions that trip people up. If you rented out part of it, used a room exclusively for business, or the garden is over half a hectare, part of the gain could be taxable. The last 9 months of ownership always qualify for relief even if you've already moved out.
How do improvement costs reduce CGT?▾
Anything that permanently enhanced the property can be deducted from the gain. Extensions, structural renovations, a new bathroom — all count. Repainting, fixing a leaky tap, replacing like-for-like — those don't. Keep your receipts and invoices. HMRC can ask for proof, and "I definitely spent £20,000 on the kitchen" won't cut it without paperwork.