Capital Gains Tax on investments (2025/26)
Quick answer: Capital Gains Tax (CGT) is charged when you sell or transfer assets — including shares, funds and second properties — at a profit above your annual allowance.
Capital Gains Tax (CGT) is charged when you sell or transfer assets — including shares, funds and second properties — at a profit above your annual allowance. The allowance dropped to £3,000 from 6 April 2024 and remains £3,000 for 2025/26. Rates on shares were raised on 30 October 2024.
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Primary source: https://www.gov.uk/capital-gains-tax
How CGT is calculated
Your gain is the sale proceeds minus what you paid for the asset, minus allowable costs (e.g. dealing fees, stamp duty on purchase). Gains and losses across all your CGT-eligible disposals in a tax year are added together.
You then deduct the £3,000 annual exempt amount. What is left is taxed at the relevant rate, depending on which band of your overall taxable income the gain falls into.
Rates from 30 October 2024
For most assets (shares, funds, business assets) the new rates are 18% if the gain falls in your basic-rate Income Tax band, and 24% above that.
For residential property that is not your main home (e.g. a buy-to-let or a second home), the rates are 18% and 24% — these were reduced from 28% to 24% on 6 April 2024.
Gains from carried interest have separate rules and a higher rate from April 2025.
Reporting and paying
Residential property: report and pay within 60 days of completion via the UK Property Disposal account.
Other gains: report through Self Assessment by 31 January after the end of the tax year. You can also use HMRC's 'real time' CGT service to report and pay sooner.
Capital losses can be offset against gains in the same year, and unused losses can be carried forward indefinitely if claimed within four years.
Sheltering with ISAs and pensions
Selling and immediately rebuying the same shares doesn't reset your CGT cost basis — the 30-day 'bed and breakfasting' rule prevents this. But selling outside an ISA and rebuying inside one (a 'Bed and ISA') is allowed and uses up your annual £20,000 ISA allowance for the rebuy.
Transfers between spouses or civil partners are exempt from CGT and can be used to make full use of both annual exempt amounts.
Common questions
- Is my main home subject to CGT?
- Normally no — Private Residence Relief exempts the gain on the sale of your only or main home, provided it has been your residence throughout your period of ownership.
- How does CGT work with foreign currency gains?
- Foreign currency held outside a personal bank account (e.g. in a brokerage settlement account, or used to buy assets) can give rise to CGT on movements in the exchange rate. Personal foreign currency for your own holiday spending is exempt.
- Do crypto-assets count?
- Yes. HMRC treats most personal disposals of cryptoassets like Bitcoin or Ether as subject to CGT, using share-pooling rules. Each disposal must be tracked in pounds sterling.