You pay Capital Gains Tax on the gain when you sell (or ‘ dispose of ’): most personal possessions worth £6,000 or more, apart from your car property that’s not your main home your main home if you’ve let it out, used it for business or it’s very large any shares that are not in an ISA or PEP business assets These are known as ‘chargeable assets’. If you sell or give away cryptoassets (like cryptocurrency or bitcoin) you should check if you have to pay Capital Gains Tax . Depending on the asset, you may be able to reduce any tax you pay by claiming a relief. If you dispose of an asset you jointly own with someone else, you have to pay Capital Gains Tax on your share of the gain. When you do not pay it You only have to pay Capital Gains Tax on your total gains above an annual tax-free allowance . You do not usually pay tax on gifts to your husband, wife, civil partner or a charity. What you do not pay it on You do not pay Capital Gains Tax on certain assets, including any gains you make from: ISAs or PEPs UK government gilts and Premium Bonds betting, lottery or pools winnings When someone dies When you inherit an asset, Inheritance Tax is usually paid by the estate of the person who’s died. You only have to work out if you need to pay Capital Gains Tax if you later dispose of the asset. Overseas assets You may have to pay Capital Gains Tax even if your asset is overseas. There are special rules if you’re a UK resident but your permanent home is not in the UK. If you’re abroad You have to pay tax on gains you make on property and land in the UK even if you’re non-resident for tax purposes . You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless either: you return to the UK within 5 years of leaving you sell shares in a company that is ‘UK property rich’ and you meet the conditions for an indirect disposal A company is UK property rich if 75% or more of the gross asset value of the company is UK land. Find out more about selling or disposing of property and land in the UK to check if you’re making an indirect disposal.

Capital Gains Tax allowances

You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). The Capital Gains tax-free allowance is: £3,000 £1,500 for trusts You can see tax-free allowances for previous years . You may also be able to reduce your tax bill by deducting losses or claiming reliefs - this depends on the asset .

Gifts to your spouse or charity

There are special rules for Capital Gains Tax on gifts or assets you dispose of to: your spouse or civil partner charity The normal rules apply for gifts to others. Your spouse or civil partner You do not pay Capital Gains Tax on assets you give or sell to your husband, wife or civil partner, unless: you separated and did not live together at all in that tax year you gave them goods for their business to sell on The tax year is from 6 April to 5 April the following year. If they later sell the asset Your spouse or civil partner may have to pay tax on any gain if they later dispose of the asset. Their gain will be calculated on the difference in value between when you first owned the asset and when they disposed of it. If this was before April 1982, your spouse or civil partner should work out their gain using the market value on 31 March 1982 instead. They should keep a record of what you paid for the asset . Gifts to charity You do not have to pay Capital Gains Tax on assets you give away to charity. You may have to pay if you sell an asset to charity for both: more than you paid for it less than market value Work out your gain using the amount the charity actually pays you, rather than the value of the asset.

Work out if you need to pay

You need to pay Capital Gains Tax when you sell an asset if your total taxable gains are above your annual Capital Gains Tax allowance . Work out your total taxable gains Work out the gain for each asset (or your share of an asset if it’s jointly owned). Do this for the personal possessions , shares or investments , UK property or business assets you’ve disposed of in the tax year. Add together the gains from each asset. Deduct any allowable losses . The tax year runs from 6 April to 5 April the following year. You’ll need to report and pay Capital Gains Tax if your taxable gains are above your allowance. If your total gains are less than the tax-free allowance You do not have to pay tax if your total taxable gains are under your Capital Gains Tax allowance . You still need to report your gains in your tax return if both of the following apply: • the total amount you sold the assets for was more than £50,000 • you’re registered for Self Assessment These rules apply from the 2023 to 2024 tax year onwards. For the tax years before 2023 to 2024, you need to report your gains in your tax return if both of the following apply: • the total amount you sold the assets for was more than 4 times your allowance • you’re registered for Self Assessment There are different rules for reporting a loss . If you’re non-resident You need to tell HMRC when you sell property or land even if your gain is below the tax-free allowance or you make a loss. Non-residents do not pay tax on other capital gains.

Reporting and paying Capital Gains Tax

You do not get a bill for Capital Gains Tax. You must work out if your total gains are above your tax-free allowance . If your total taxable gains are above your allowance, you’ll need to report and pay Capital Gains Tax . You may get tax relief if you sold a property that was your main home . When to report and pay You must report any capital gains and pay any money you owe by the deadline. Date of sale (or ‘disposal’) When you must report and pay If you sold a residential property in the UK with a completion date on or after 27 October 2021 Within 60 days If you sold a residential property in the UK with a completion date between 6 April 2020 and 26 October 2021 Within 30 days If you have other gains to report In the tax year after you sold or disposed of an asset if you use a Self Assessment tax return . If you’re eligible, you may be able to use the ‘real time’ Capital Gains Tax service to report by 31 December in the tax year after the sale Do not wait until the next tax year to report gains on UK residential property sold since 6 April 2020 . You may have to pay interest and a penalty if you do. If you’re not resident in the UK You must report all sales of UK property or land (residential and non-residential) if you’re not a UK resident, even if you have no tax to pay.

Capital Gains Tax rates

You pay a different rate of tax on gains from residential property than you do on other assets. You do not usually pay tax when you sell your home . If you pay higher rate Income Tax If you’re a higher or additional rate taxpayer , the amount you pay will depend on the date and type of your gain. Gains from 30 October 2024 onwards You’ll pay: 24% on your gains from residential property 28% on your gains from ‘carried interest’ if you manage an investment fund 24% on your gains from other chargeable assets Gains between 6 April 2024 to 29 October 2024 You’ll pay: 24% on your gains from residential property 28% on your gains from ‘carried interest’ if you manage an investment fund 20% on your gains from other chargeable assets You can see the rates and allowance for previous years . If you pay basic rate Income Tax If you’re a basic rate taxpayer , the rate you pay depends on the size of your gain, your taxable income and whether your gain is from residential property or other assets. Work out how much taxable income you have - this is your income minus your Personal Allowance and any other Income Tax reliefs you’re entitled to. Work out your total taxable gains . Deduct your tax-free allowance from your total taxable gains. Add this amount to your taxable income. If this amount is within the basic Income Tax band , you’ll pay 18% on your gains made from 30 October 2024. For gains made between 6 April 2024 to 29 October 2024, you’ll pay 10% on your gains (or 18% on residential property and carried interest). For any amount above the basic Income Tax band, you’ll pay 24% on gains made from 30 October 2024 (or 28% on carried interest). For gains made between 6 April 2024 and 29 October 2024, you’ll pay 20% (or 24% on residential property and 28% on carried interest). Example 1 You make a gain on or after 30 October 2024. Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,600. First, deduct the Capital Gains tax-free allowance from your taxable gain. For the 2024 to 2025 tax year the allowance is £3,000, which leaves £9,600 to pay tax on. Add this to your taxable income. Because the combined amount of £29,600 is less than £37,700 (the basic rate band for the 2024 to 2025 tax year), you pay Capital Gains Tax at 18%. This means you’ll pay £1,728 in Capital Gains Tax. Example 2 You make a gain between 6 April 2024 and 29 October 2024. Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,600. Your gains are not from residential property. First, deduct the Capital Gains tax-free allowance from your taxable gain. For the 2024 to 2025 tax year the allowance is £3,000, which leaves £9,600 to pay tax on. Add this to your taxable income. Because the combined amount of £29,600 is less than £37,700 (the basic rate band for the 2024 to 2025 tax year), you pay Capital Gains Tax at 10%. This means you’ll pay £960 in Capital Gains Tax. If you have gains from both residential property and other assets You can use your tax-free allowance against the gains that would be charged at the highest rates (for example where you would pay 24% or 28% tax). You can see the rates and allowance for previous years . If you’re a trustee, personal representative or business Trustees or personal representatives of someone who’s died pay: 24% on residential property 24% on other chargeable assets (or 20% on gains between 6 April 2024 and 29 October 2024) Personal representatives of someone who’s died pay 28% on carried interest. You’ll pay 10% if you’re a sole trader or partnership and your gains qualify for Business Asset Disposal Relief . You can see the rates and allowance for previous years .

You can report losses on a chargeable asset to HM Revenue and Customs ( HMRC ) to reduce your total taxable gains . Losses used in this way are called ‘allowable losses’. Using losses to reduce your gain When you report a loss, the amount is deducted from the gains you made in the same tax year. If your total taxable gain is still above the tax-free allowance , you can deduct unused losses from previous tax years. If they reduce your gain to the tax-free allowance, you can carry forward the remaining losses to a future tax year. Reporting losses Claim for your loss by including it on your tax return. If you’ve never made a gain and are not registered for Self Assessment, you can write to HMRC instead. You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset. There’s an exception for losses made before 5 April 1996, which you can still claim for. You must deduct these after any more recent losses. Losses when disposing of assets to family and others Your husband, wife or civil partner You usually do not pay Capital Gains Tax on assets you give or sell to your spouse or civil partner . You cannot claim losses against these assets. Other family members and ‘connected people’ You cannot deduct a loss from giving, selling or disposing of an asset to a family member unless you’re offsetting a gain from the same person. This also applies to ‘connected people’ like business partners. Connected people HMRC defines connected people as including: your brothers, sisters, parents, grandparents, children and grandchildren, and their husbands, wives or civil partners the brothers, sisters, parents, grandparents, children and grandchildren of your husband, wife or civil partner - and their husbands, wives or civil partners business partners a company you control trustees where you’re the ‘settlor’ (or someone connected to you is) Claiming for an asset that’s lost its value You can claim losses on assets that you still own if they become worthless or of ‘negligible value’. HMRC has guidance on how to make a negligible value claim . Special rules HMRC has guidance on the special rules for losses: when someone dies if you’re non-resident and sell UK property or land if you’ve temporarily lived abroad as a ‘ non-resident ’ from your income on shares that are unquoted or in the Enterprise Investment Scheme on overseas assets if you’re ‘non-domiciled’ in the UK and have claimed the ‘remittance basis’

You need to collect records to work out your gains and fill in your tax return. You must keep them for at least a year after the Self Assessment deadline . You’ll need to keep records for longer if you sent your tax return late or HM Revenue and Customs ( HMRC ) have started a check into your return. Businesses must keep records for 5 years after the deadline. Records you’ll need Keep receipts, bills and invoices that show the date and the amount: you paid for an asset of any additional costs like fees for professional advice, Stamp Duty, improvement costs, or to establish the market value you received for the asset - including things like payments you get later in instalments, or compensation if the asset was damaged Also keep any contracts for buying and selling the asset (for example from solicitors or stockbrokers) and copies of any valuations. If you do not have records You must try to recreate your records if you cannot replace them after they’ve been lost, stolen or destroyed. If you fill in your tax return using recreated records, you’ll need to show where figures are: estimated - that you want HMRC to accept as final provisional - that you’ll update later with the actual figures

Your gain is usually the difference between what you paid for your asset and what you sold it for. There are some situations where you use the market value instead. Situation Use market value at Gifts Date of gift Assets sold for less than they were worth to help the buyer Date of sale Inherited assets where you do not know the Inheritance Tax value Date of death Assets owned before April 1982 31 March 1982 Checking the market value HM Revenue and Customs ( HMRC ) can check your valuation. After you’ve disposed of the asset, complete a ‘ Post-transaction valuation check ’ form. Return it to the address on the form - allow at least 3 months for HMRC ’s response.

Capital Gains Tax: what you pay it on, rates and allowances

Overview

Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.

It’s the gain you make that’s taxed, not the amount of money you receive. For example, if you bought a painting for £5,000 and sold it later for £25,000, you’ve made a gain of £20,000 (£25,000 minus £5,000).

Some assets are tax-free. You also do not have to pay Capital Gains Tax if all your gains in a year are under your tax-free allowance.

If you sold a UK residential property on or after 6 April 2020 and you have tax on gains to pay, you can report and pay using a Capital Gains Tax on UK property account.

This guide is also available in Welsh (Cymraeg).

Disposing of an asset

Disposing of an asset includes:

selling it
giving it away as a gift, or transferring it to someone else
swapping it for something else
getting compensation for it - like an insurance payout if it’s been lost or destroyed

View a printable version of the whole guide

Capital Gains Tax: what you pay it on, rates and allowances

Overview

Disposing of an asset

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Capital Gains Tax: what you pay it on, rates and allowances

Overview

Disposing of an asset

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