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Capital Gains Tax allowances and rates
You might have to pay Capital Gains Tax if you've sold a property that you own for more money than you bought it for. However, it should only be due if the property is not your main residential home, and the profit you've made exceeds the current year's Capital Gains Tax threshold.
What are the Capital Gains Tax rates?
The Capital Gains Tax, or CGT, rates you'll pay will depend on your level of taxable income (tax bracket) and the type of assets that you sell.
Currently, these are the rates payable on disposal of property assets, depending on your income tax bracket.
| Income tax bracket | Capital gains due on property sales |
|---|---|
| Basic rate (£12, 571 - £50,270) | 18% |
| Higher rate (£50,271 - £125,140) | 24% |
| Additional rate (£125,140+) | 24% |
Different rules apply to trusts, find out more about capital gains tax for trusts here.
What is the Capital Gains Tax allowance in the UK in 2025?
The Capital Gains Tax allowance for the 2025/26 tax year is £3,000.
This is the amount of profit you can make from selling an asset, such as a residential property, before any tax is payable.
The same tax-free allowance applies to everyone, regardless of income tax bracket, and it cannot be transferred to another person.
What was the Capital Gains Tax allowance in previous years?
The Capital Gains Tax allowance has seen a dramatic decrease in recent years. This is likely to have a significant impact on investors, including those in the buy-to-let market.
| Previous tax years | Capital Gains Tax allowance |
|---|---|
| 2025/26 | £3,000 |
| 2024/25 | £3,000 |
| 2023/24 | £6,000 |
| 2022/23 | £12,300 |
| 2021/22 | £12,300 |
| 2020/21 | £12,300 |
| 2019/20 | £12000 |
| 2018/19 | £11,700 |
| 2017/18 | £11,300 |
| 2016/17 | £11,100 |
| 2015/16 | £11,100 |
What is considered a capital gain?
Capital Gains Tax is a tax payable on any profit made when selling or otherwise disposing of an asset. The tax only applies to the profit (the difference between the price you paid and how much you get back when you sell it).
Here's an example
You buy a property for £200,000
You then sell it for £210,000
Capital gains (or profit) from this transaction would be £10,000
You will therefore need to pay tax on that £10,000*
*But only if the property is not your main home, and your total capital gains exceeds the annual tax-free allowance given for the current tax year.
Will I need to pay Capital Gains Tax when I sell my home?
You won’t usually need to pay Capital Gains Tax when you sell your main residential home, unless you have let out part of it for profit, used it solely for business purposes or the size of the property exceeds 5,000 square metres.
If you sell a second home, or any subsequently owned residential properties, all profits will be subject to CGT.
What do you pay Capital Gains Tax on?
Capital Gains Tax is payable on profits made from the sale of any property that is not your main residential home and other high-value assets. For example:
Holiday homes and holiday lets
Buy to let investment properties
Any other commercial property
Personal possessions including jewellery, paintings, antiques and coins worth £6,000 or more
Shares that aren't in an ISA (Individual Savings Account) or a PEP (Personal Equity Plan)
Non-property business assets, that are not classed as wasting assets (wasting assets typically have a lifespan of less than 50 years, so things like cars or furniture)
Crypto assets such as cryptocurrency or NFTs
Are gifts included in the Capital Gains Tax allowance?
There are lots of Capital Gains Tax exemptions, including certain gifts, such as:
Gifts between husband and wife or registered civil partners
Gifts to charities
The sale or gifting of private cars
The sale or gifting of jewellery, antiques, paintings and coins worth below £6,000
Gambling winnings
ISAs, pensions and other national savings products
Life insurance payouts, unless they are second hand
Anything you leave behind when you die (although inheritance tax may apply)
How do you calculate how much Capital Gains Tax you have to pay?
Here are the steps to calculate how much you owe in Capital Gains Tax:
Work out the gain for each asset you’ve made a profit on (or your share of an asset if it’s jointly owned)
Add together the gains from each asset
Deduct any ‘allowable losses’ if applicable
If the total is greater than the relevant tax year’s CGT allowance, you’ll need to pay the appropriate CGT rate on the element that exceeds it for your tax bracket
You can find help with calculating how much you need to pay using the government’s Capital Gains Tax calculator.
When should you pay the Capital Gains Tax?
HMRC does not send out bills for Capital Gains Tax, so it’s your personal responsibility to work out if you’ve made CGT gains above your tax-free allowance.
If your total taxable gains are above your allowance, you’ll need to report and pay Capital Gains Tax within the designated timescales:
Within 60 days for any property sale (except your main residential home) in the UK with a completion date on or after 27 October 2021
Typically reported and paid following the end of the tax year in which you sold or disposed of any non-property related asset
How can you pay Capital Gains Tax?
Payments are usually made online using the Government Gateway service, and can be done through your tax return, should you provide one.
You can also use the HMRC 'real-time' Capital Gains Tax service or contact HMRC to request a paper CGT form if you’re unable to use the service.
Don't get caught out: Although capital gains tax is self-reportable, if you do not inform HMRC about any relevant profits and pay the applicable CGT owed, they will issue penalty fines that are likely to outweigh the original bill!”Jason McDonald, Mortgage Expert
Capital gain tax FAQs
Are your assets included in your CGT at market value?
A gain for the purpose of CGT is usually the difference between what you paid for your asset and what you sold it for.
However, there are some situations where the market value should be used instead:
Gifts should be costed at market value at the time the gift was given
For assets that were sold at a discount rate to benefit the buyer, the market value at the date of sale should be used
For inherited gifts where the inheritance tax value is unknown, the market rate at the gift givers' time of death should be used
For any assets owned prior to 1982, the market value at 31 March 1982 should be used
What profits are CGT free when selling a property?
Any profits that are below the current CGT allowance are free from Capital Gains Tax liability, as well any profits made from the sale of your main residential home in most cases.
Are there ways to reduce your capital gains tax?
There are a few ways to reduce the Capital Gains Tax you might need to pay, depending on your circumstances. For example, you can report any losses from the sale of assets that would usually be liable for CGT to HM Revenue and Customs (HMRC). These are known as ‘allowable losses’ and are deducted from any gains you’ve made in the same tax year.
The allowance is also transferable between different tax years, if you didn't use all of your allowable losses from previous years.
I own a second property with my partner, will I need to pay Capital Gains Tax?
If you sell a property you jointly own with a partner that is not your main residential home, you may have to pay capital gains tax on your share of the gain.
YOUR HOME/PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
The FCA does not regulate mortgages on commercial or investment buy-to-let properties.
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