CGT Planning
in UK
CGT Planning UK: What You Need to Know in 2025/26
Capital Gains Tax planning in the UK has never mattered more. With the Annual Exempt Amount fixed at just £3,000, down from £12,300 only three years earlier, many investors, landlords, property owners, and business sellers now face CGT bills they could previously have avoided.
This guide explains the 2025/26 CGT rates, key allowances, available reliefs, reporting deadlines, and practical planning strategies that can help reduce your tax bill before you dispose of a chargeable asset.
What Is Capital Gains Tax?
Capital Gains Tax is charged on the profit you make when you sell, gift, transfer, or otherwise dispose of an asset that has increased in value. You do not pay CGT on the full sale proceeds. The tax applies to the gain after deducting allowable costs and any available exemption or relief.
Disposals that can trigger CGT include
- Selling a second home, buy-to-let, or rental property.
- Selling shares, funds, or cryptocurrency held outside an ISA or pension.
- Selling a business, business shares, or business assets.
- Gifting valuable assets to someone other than a spouse, civil partner, or charity.
- Receiving insurance proceeds for lost or destroyed chargeable assets.
CGT Rates for 2025/26
Following the October 2024 Autumn Budget, CGT rates on shares and other assets were aligned with residential property rates for disposals made on or after 30 October 2024. For the 2025/26 tax year, most individuals pay 18% where gains fall within the basic rate band and 24% where gains fall into the higher or additional rate bands.
| Asset type or taxpayer | Basic rate band | Higher or additional rate |
|---|---|---|
| Shares, funds, crypto and other assets | 18% | 24% |
| UK residential property | 18% | 24% |
| Trustees and personal representatives | 24% | 24% |
| Business Asset Disposal Relief | 14% flat rate on qualifying gains up to the lifetime limit | 14% flat rate on qualifying gains up to the lifetime limit |
| Carried interest gains | 32% | 32% |
The Annual Exempt Amount
Every individual has an Annual Exempt Amount, which is the amount of gain that can be realised in a tax year before CGT becomes payable. From 2024/25 onwards, the exemption is fixed at £3,000 for individuals and personal representatives, and £1,500 for most trustees.
The allowance cannot be carried forward. If you do not use it in 2025/26, it is lost. This makes disposal timing especially important where you have flexibility over when assets are sold.
Key CGT Reliefs and Exemptions
CGT planning depends on identifying which exemptions and reliefs apply before a disposal takes place. Missing a relief or failing to meet a qualifying condition can create avoidable tax.
| Relief or exemption | How it can help |
|---|---|
| Private Residence Relief | Your only or main home may be fully exempt. Partial relief can apply where the property was your main residence for only part of the ownership period, and the final 9 months normally qualify. |
| Business Asset Disposal Relief | Qualifying business owners and shareholders can pay a reduced rate on up to £1 million of lifetime qualifying gains. The rate is 14% in 2025/26 and rises to 18% from 6 April 2026. |
| Gift Hold-Over Relief | Gifts of qualifying business assets or shares in an unquoted trading company can defer the gain until the recipient later disposes of the asset. |
| Rollover Relief | CGT on qualifying business assets can be deferred where proceeds are reinvested in another qualifying asset within the permitted window. |
| EIS Deferral Relief | Gains can be deferred by reinvesting into Enterprise Investment Scheme qualifying companies, subject to the detailed rules and investment risk. |
| ISA and pension sheltering | Gains inside a Stocks and Shares ISA are free of CGT, while pension contributions may reduce taxable income and help more gains fall within the basic rate band. |
Smart CGT Planning Strategies for 2025/26
Effective CGT planning is usually about timing, ownership, evidence, and relief eligibility. The right approach depends on the asset, your wider income position, and whether the disposal can be planned in advance.
Practical planning steps include
- Spreading disposals across tax years to use the £3,000 Annual Exempt Amount more than once.
- Transferring assets between spouses or civil partners to use both allowances and basic rate bands.
- Offsetting capital losses against gains and reporting losses to HMRC within the required time limit.
- Using the £20,000 annual ISA allowance so future investment growth is sheltered from CGT.
- Claiming allowable costs, including purchase costs, disposal costs, stamp duty, and qualifying capital improvements.
- Checking Business Asset Disposal Relief conditions before selling a business or company shares.
- Considering gifts to registered charities where appropriate, as qualifying gifts can be exempt from CGT.
How and When to Report CGT to HMRC
Reporting deadlines depend on the type of asset disposed of. UK residential property has a fast reporting and payment deadline, while most other disposals are handled through Self Assessment.
| Situation | Reporting rule |
|---|---|
| UK residential property | Report the gain and pay any CGT due within 60 days of completion using HMRC's online Capital Gains Tax on UK Property service. |
| Shares, crypto, business assets and other non-property disposals | Report gains through Self Assessment. The online filing deadline for 2025/26 is 31 January 2027. |
| Disposal proceeds over £50,000 | You may need to report through Self Assessment even where no CGT is due after exemptions and losses. |
| Capital losses | Losses must be reported to HMRC within four years of the end of the tax year in which they arose before they can be carried forward. |
CGT Changes to Watch
The CGT landscape has changed quickly. The Annual Exempt Amount was reduced from £12,300 to £6,000 from 6 April 2023, then to £3,000 from 6 April 2024. Main rates increased for shares and other assets from 30 October 2024, and the Business Asset Disposal Relief rate increased from 10% to 14% from 6 April 2025.
The next major scheduled change is the increase in the Business Asset Disposal Relief rate from 14% to 18% from 6 April 2026. Business owners planning a disposal should review their position early, because eligibility often depends on conditions being met before the sale.
Why Professional CGT Advice Matters
With the annual exemption at a historic low and rates higher than they were in previous years, even modest asset disposals can create a meaningful tax liability. The rules around timing, allowable costs, spousal transfers, relief eligibility, and reporting deadlines are detailed, and mistakes can be expensive.
At ENCY&LINE, our tax advisors help clients across Maidenhead, London, and the UK understand their CGT position, identify available reliefs, plan disposals tax-efficiently, and meet HMRC reporting obligations. Whether you are selling a buy-to-let property, exiting a business, or managing an investment portfolio, we provide clear and practical Capital Gains Tax advice.
The Annual Exempt Amount is £3,000 for individuals and personal representatives, and £1,500 for most trustees.
Most individuals pay 18% where gains fall within the basic rate band and 24% where gains fall within the higher or additional rate bands.
UK residential property gains normally need to be reported and paid within 60 days of completion using HMRC's online CGT property service.
Transfers between spouses and civil partners are generally made on a no gain, no loss basis, which can help use both allowances and tax bands.
Early advice can help identify reliefs, allowable costs, timing options, reporting deadlines, and planning steps that may reduce the final CGT bill.
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