Tax Advice on Capital
Gains Tax in UK
Tax Advice on Capital Gains Tax (CGT) in UK: Rates, Reliefs and Reporting
Capital Gains Tax (CGT) is one of the most frequently misunderstood areas of the UK tax system, and one of the most consequential. Whether you are selling a second property, disposing of shares, exiting a business, or transferring assets, the gain you make may be subject to CGT. The rates, reliefs, and reporting obligations involved are more complex than many people realise.
Getting the right tax advice on Capital Gains Tax in UK before a disposal, not after, can make a substantial difference to your final tax bill. At ENCY&LINE, our tax advisors work with individuals, investors, landlords, trustees, and business owners to calculate gains accurately, identify available reliefs, and meet HMRC reporting deadlines.
What Is Capital Gains Tax in the UK?
Capital Gains Tax is charged on the profit you make when you sell or otherwise dispose of an asset that has increased in value. It is the gain that is taxed, not the total sale proceeds. A disposal can include selling, gifting, transferring, swapping, or receiving compensation when an asset is lost or destroyed.
CGT applies to individuals, personal representatives, and trustees. Companies do not pay CGT directly; company chargeable gains are usually included within Corporation Tax on total profits.
Assets commonly subject to CGT
- Residential property that is not your main home, including buy-to-let and investment property.
- Shares and investment funds held outside an ISA or pension.
- Business assets and goodwill on the sale or closure of a business.
- Land and certain personal possessions worth over £6,000.
- Assets transferred as gifts, swaps, or compensation events.
Assets held within a Stocks and Shares ISA or pension are outside the scope of CGT. Gains within those wrappers are tax-free regardless of size, which makes investment structure an important planning point.
CGT Rates for 2026 to 2027
For gains made from 6 April 2026, higher and additional rate taxpayers generally pay CGT at 24%. Basic rate taxpayers pay 18% on gains that fall within the basic rate band and 24% on gains above it. Trustees and personal representatives generally pay 24%.
| Taxpayer position | CGT rate from 6 April 2026 |
|---|---|
| Basic rate taxpayer | 18% on gains within the basic rate band, then 24% above it. |
| Higher or additional rate taxpayer | 24% on taxable gains. |
| Personal representatives and trustees | 24% on taxable gains. |
Business Asset Disposal Relief and Investors' Relief
For qualifying business disposals, a reduced CGT rate may apply under Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, subject to a £1 million lifetime limit. From 6 April 2026, the BADR rate is 18% for qualifying gains. Conditions are detailed and normally include ownership, shareholding, voting rights, employment or office-holder status, and a qualifying period before disposal.
| Period | BADR / Investors' Relief rate |
|---|---|
| Up to 5 April 2025 | 10% |
| 6 April 2025 to 5 April 2026 | 14% |
| From 6 April 2026 | 18% |
The Annual CGT Exemption
Every individual receives an Annual Exempt Amount, which is the tax-free threshold below which no CGT is payable in a given tax year. For the current rules, the allowance is £3,000 for individuals and personal representatives, and £1,500 for most trusts. Unused allowance cannot be carried forward.
The reduction in the Annual Exempt Amount means more landlords, investors, and business owners now fall within the CGT net even where gains are relatively modest. This makes early calculation and planning more important than ever.
What Can Reduce Your CGT Liability?
Effective tax advice on Capital Gains Tax in UK focuses on identifying every relief and deduction before tax is calculated. The most common planning points include allowable costs, Private Residence Relief, business reliefs, capital losses, spouse or civil partner transfers, and tax-efficient wrappers.
| Relief or deduction | How it can help |
|---|---|
| Allowable costs and deductions | Deduct acquisition cost, incidental purchase costs, improvement costs, and disposal costs such as legal or estate agent fees. |
| Private Residence Relief | Can exempt all or part of a gain where a property has been your only or main home. The final 9 months of ownership usually qualify. |
| Business Asset Disposal Relief | Can reduce the rate on qualifying business disposals, subject to conditions and lifetime limits. |
| Allowable capital losses | Losses can reduce gains in the same tax year and, if reported, may be carried forward against future gains. |
| Spouse or civil partner transfers | Transfers between cohabiting spouses or civil partners are usually on a no gain / no loss basis, allowing planning before disposal. |
| ISA and pension wrappers | Gains on investments held within ISAs or pensions are outside CGT. |
Reporting and Paying CGT to HMRC
When you sell UK residential property and a CGT liability arises, you normally need to report and pay the tax within 60 days of completion using HMRC's Capital Gains Tax on UK property service. Other gains, including many share and business asset disposals, are usually reported through the Capital Gains pages of your Self Assessment tax return, with payment due by 31 January after the end of the tax year of disposal.
| Disposal type | Reporting deadline | Payment deadline |
|---|---|---|
| UK residential property | 60 days from completion. | 60 days from completion. |
| Shares, business assets, and other assets | Usually 31 January after the tax year end through Self Assessment. | Usually 31 January after the tax year end. |
You may need to report gains to HMRC if your gains exceed the Annual Exempt Amount or if your total disposal proceeds exceed the reporting threshold, even where little or no tax is due. Interest and penalties can apply for late or inaccurate reporting.
Common CGT Mistakes to Avoid
CGT errors often happen because people calculate the tax only after the transaction has completed. By that stage, many planning options have already been lost.
Frequent CGT problems
- Not claiming all allowable costs, including legal fees, improvement costs, and disposal costs.
- Missing the 60-day residential property reporting and payment deadline.
- Failing to report capital losses within the permitted time limit.
- Underestimating the impact of the reduced £3,000 Annual Exempt Amount.
- Poor timing of disposals where spreading gains across tax years could have helped.
- Not seeking advice before disposal, when more options are still available.
Why Professional Tax Advice on CGT Matters
Capital Gains Tax sits at the intersection of income tax, property ownership, business structure, investment planning, and estate planning. Rates and reliefs have changed, BADR rates have moved again from April 2026, and the interaction between CGT and other taxes needs careful consideration.
At ENCY&LINE, we provide expert tax advice on Capital Gains Tax in UK tailored to your situation, whether you are a landlord selling a buy-to-let, a business owner planning an exit, or an investor managing a portfolio. Our CGT advice covers chargeable gain calculations, available deductions, PRR, BADR, Investors' Relief, spouse transfers, joint ownership structure, 60-day property returns, Self Assessment CGT pages, and the interaction with Inheritance Tax and Income Tax.
Get Expert CGT Advice Before You Act
Planning a property sale, business exit, or investment disposal? Speak to an ENCY&LINE CGT specialist before you proceed. A short consultation before completion can prevent missed reliefs, late reporting, and unnecessary tax.
Capital Gains Tax is charged on the profit made when you sell, gift, transfer, swap, or otherwise dispose of an asset that has increased in value.
Basic rate taxpayers usually pay 18% on gains within the basic rate band and 24% above it. Higher and additional rate taxpayers, trustees, and personal representatives generally pay 24%.
If CGT is due on a UK residential property disposal, the gain normally needs to be reported and paid within 60 days of completion.
Yes. CGT may be reduced through allowable costs, capital losses, Private Residence Relief, Business Asset Disposal Relief, spouse or civil partner transfers, and careful timing before disposal.
CGT advice is most valuable before selling, gifting, transferring, or restructuring assets. After completion, many relief and timing options may no longer be available.
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