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Capital Gains Tax is a tax on the profit when you sell (or 鈥榙ispose of鈥�) something (an 鈥榓sset鈥�) that鈥檚 increased in value.

It鈥檚 the gain you make that鈥檚 taxed, not the amount of money you receive. For example, if you bought a painting for 拢5,000 and sold it later for 拢25,000, you鈥檝e made a gain of 拢20,000 (拢25,000 minus 拢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.

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鈥檚 been lost or destroyed

You pay Capital Gains Tax on the gain when you sell (or 鈥�dispose of鈥�):

• most personal possessions worth 拢6,000 or more, apart from your car
• property that鈥檚 not your main home
• your main home if you鈥檝e let it out, used it for business or it鈥檚 very large
• any shares that are not in an ISA or PEP
• business assets

These are known as 鈥榗hargeable assets鈥�.

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鈥檚 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鈥檙e a UK resident but your permanent home is not in the UK.

If you鈥檙e abroad

You have to pay tax on gains you make on property and land in the UK even if you鈥檙e 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 鈥楿K property rich鈥� 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鈥檙e making an indirect disposal.

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:

• 拢3,000
• 拢1,500 for trusts

You can see tax-free allowances for previous years.

There are special rules for Capital Gains Tax on gifts or assets you dispose of to:

• your spouse or civil partner
• charity

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.

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

1. Work out the gain for each asset (or your share of an asset if it鈥檚 jointly owned). Do this for the personal possessions, shares or investments , UK property or business assets you鈥檝e disposed of in the tax year.

2. Add together the gains from each asset.

3. Deduct any allowable losses.

The tax year runs from 6 April to 5 April the following year.

You鈥檒l 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:

鈥� the total amount you sold the assets for was more than 拢50,000
鈥� you鈥檙e 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:

鈥� the total amount you sold the assets for was more than 4 times your allowance
鈥� you鈥檙e registered for Self Assessment

If you鈥檙e 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.

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鈥檒l need to report and pay Capital Gains Tax.

When to report and pay

You must report any capital gains and pay any money you owe by the deadline.

If you鈥檙e not resident in the UK

You must report all sales of UK property or land (residential and non-residential) if you鈥檙e not a UK resident, even if you have no tax to pay.

You may pay a different rate of tax on gains from residential property than you do on other assets for disposals on or before 29 October 2024.

If you pay higher rate Income Tax

If you鈥檙e a higher or additional rate taxpayer, the amount you pay will depend on the date and type of your gain.

Gains from 6 April 2025 onwards聽

You鈥檒l pay:

• 24% on your gains from residential property
• 32% on your gains from鈥�鈥榗arried interest鈥�鈥痠f you manage an investment fund
• 24% 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鈥檙e a鈥�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.

Gains from 6 April 2025 onwards聽

You鈥檒l pay:聽聽

• 18% on your gains from residential property
• 32% on your gains from鈥�鈥榗arried interest鈥�鈥痠f you manage an investment fund
• 18% on your gains from other chargeable assets

You can see the鈥�rates and allowance for previous years.

To work out your rate:聽

1. Work out how much鈥�taxable income鈥痽ou have - this is your income minus your Personal Allowance and any other鈥�Income Tax reliefs鈥痽ou鈥檙e entitled to.

2. Work out your total taxable gains.

3. Deduct your tax-free allowance鈥痜rom your total taxable gains.

4. Add this amount to your taxable income.

5. If this amount is within the basic Income Tax band, you鈥檒l pay 18% on your gains made from 6 April 2025 (or 32% on carried interest).

6. For any amount above the basic Income Tax band, you鈥檒l pay 24% on gains made from 6 April 2025 (or 32% on carried interest).

Example 1

Example 2

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 32% tax).

You can see the rates and allowance for previous years.

If you鈥檙e a trustee, personal representative or business

Trustees鈥痮r personal representatives of someone who鈥檚 died from 6 April 2025 pay:

• 24% on residential property
• 24% on other chargeable assets

Personal representatives of someone who鈥檚 died pay 32% on carried interest.

From 6 April 2025 you鈥檒l pay 14% if you鈥檙e a sole trader or partnership and your gains qualify for鈥�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.

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鈥檝e 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.

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 鈥榗onnected people鈥�

You cannot deduct a loss from giving, selling or disposing of an asset to a family member unless you鈥檙e offsetting a gain from the same person.

This also applies to 鈥榗onnected people鈥� 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鈥檙e the 鈥榮ettlor鈥� (or someone connected to you is)

Claiming for an asset that鈥檚 lost its value

You can claim losses on assets that you still own if they become worthless or of 鈥榥egligible value鈥�.

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鈥檙e non-resident and sell UK property or land
• if you鈥檝e temporarily lived abroad as a 鈥�non-resident鈥�
• from your income on shares that are unquoted or in the Enterprise Investment Scheme
• on overseas assets if you鈥檙e 鈥榥on-domiciled鈥� in the UK and have claimed the 鈥榬emittance basis鈥�

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鈥檒l 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鈥檒l 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鈥檝e been lost, stolen or destroyed.

If you fill in your tax return using recreated records, you鈥檒l need to show where figures are:

• estimated - that you want HMRC to accept as final
• provisional - that you鈥檒l 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.

Checking the market value

HM Revenue and Customs (HMRC) can check your valuation.

After you鈥檝e disposed of the asset, complete a 鈥�Post-transaction valuation check鈥� form. Return it to the address on the form - allow at least 3 months for HMRC鈥檚 response.