Capital gains
Sold something at a profit? Here is the tax, and where it goes
Sell, give away or swap something that has gone up in value and the increase is a capital gain. Each year the first £3,000 of gains is exempt. Above that, the rate depends on how much of your basic rate band your income has already used: 18% inside it, 24% above it. A UK residential property sale with tax to pay is reported and paid within 60 days of completion through its own online service; everything is then brought together on the capital gains pages of your tax return. This page works out the tax, tells you which reports you need, and walks through both.
How Capital Gains Tax works
1. The gain is proceeds minus costs
What you sold it for, less what it cost you: the purchase price, stamp duty, legal and agent fees, dealing charges, and improvements such as an extension. Repairs, running costs and mortgage interest are not costs for this purpose. A gift counts as a sale at market value, except to your spouse or civil partner.
2. The first £3,000 a year is exempt
The annual exempt amount is set against your gains after losses. It cannot be carried forward: an unused exempt amount is simply lost, which is why people with large holdings sell a little each year.
3. Your income decides the rate
Add the taxable gain on top of your taxable income for the year. Whatever fits inside the basic rate band (£37,700 of income above the £12,570 Personal Allowance) is taxed at 18%; the rest at 24%. Since 30 October 2024 the same two rates apply to residential property and to everything else.
4. Losses come first, and must be claimed
A loss in the year is set against the year’s gains before the exempt amount. Losses from earlier years are used after the exempt amount, so none of it is wasted. A loss only counts if you claim it, on the return or by letter, within four years of the end of the tax year it arose in.
5. UK residential property: 60 days
Sell a UK home that is not your main residence (a buy-to-let, a second home, an inherited house) with tax to pay, and you must report the sale and pay the tax within 60 days of completion, through HMRC’s Capital Gains Tax on UK property service. Missing it costs £100 at once and more after six months. Your own main home is exempt through private residence relief.
6. Then the tax return
If you send a tax return, every disposal goes on the capital gains pages (SA108), including the property already reported, with the tax already paid entered so it is not charged twice. You also need the pages, even with no tax to pay, when your proceeds for the year reach £50,000 or you are claiming a loss. If you are not in Self Assessment and only have a small share gain to report, HMRC’s ‘real time’ service lets you report it without a return.
A worked example (2025/26)
Priya earns £30,000 from her job and sells shares for £40,000 that cost her £10,000, a gain of £30,000.
- The gain of £30,000 less the £3,000 exempt amount leaves £27,000 to tax.
- Her pay of £30,000 less the £12,570 Personal Allowance is £17,430 of taxable income, so £20,270 of the £37,700 basic rate band is still free.
- £20,270 of the gain fits in that space and is taxed at 18% (£3,648.60); the remaining £6,730 is taxed at 24% (£1,615.20). Capital Gains Tax due: £5,263.80.
- Shares are not property, so there is no £5,263.80 to pay within 60 days: it goes on the capital gains pages of her tax return and is paid with the rest of her bill on 31 January.
Work out your own Capital Gains Tax
Enter your income for the year and what you sold and what it cost, by type. We show the gain, the losses and exempt amount taken off, each slice and its rate, the tax, what to report where, and the capital gains page box by box.
Your figures
Pay, pensions and profits added together. It decides how much of the gain is taxed at the lower rate. Leave blank if you have none.
Losses claimed on earlier returns and not yet used. Leave blank if none.
Selling a UK home that is not your main residence
Within 60 days
Report and pay through the Capital Gains Tax on UK property service within 60 days of completion, even if you will also send a tax return. If there is no tax to pay (the gain is within the exempt amount, or a loss), no 60-day report is needed for a UK resident.
Private residence relief
The years you lived in the property as your main home, plus the final nine months of ownership, are exempt. The rest of the gain is taxed. Lettings relief now only applies where you shared the home with your tenant.
Joint owners and estimates
Each owner reports their own share. The service asks for an estimate of your income for the year to set the rate; if the estimate is wrong, your tax return corrects the tax, so it is never lost or overpaid for good.
Questions people ask
“I sold my own home. Do I owe anything?”
Usually not. Private residence relief exempts the gain on your only or main home for the whole time you lived in it, plus the last nine months. It stops being fully exempt if you let it out, used part exclusively for business, or the grounds are over half a hectare.
“Does an ISA or a pension count?”
No. Gains inside an ISA or a pension are free of Capital Gains Tax and are never reported. Only holdings outside them count.
“What about crypto?”
Crypto is an asset like shares: selling it, swapping one coin for another, or spending it is a disposal, and the gain is proceeds minus cost in pounds on the day. Exchanges’ tax reports give the totals; the same £3,000 exempt amount and rates apply.
“I gave a property to my daughter. Is there tax with no money changing hands?”
Yes. A gift to anyone other than your spouse or civil partner is treated as a sale at market value, so the gain is the value on the day less what it cost you, and the 60-day rule applies to residential property. Gifts between spouses and civil partners are at no gain, no loss.
“I run a business and sold it. Is the rate different?”
Business Asset Disposal Relief taxes qualifying gains on selling all or part of a business you have owned for two years at 14%, up to a lifetime limit of £1,000,000. It is claimed on the same capital gains pages; the rate is rising in steps from April 2025.