Capital Gains Tax Explained (2025/26)
Published on January 10, 2026
Capital Gains Tax (CGT) 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.
Annual Exempt Amount
For the 2025/26 tax year, the Annual Exempt Amount is £3,000 for individuals. This means you can make gains up to this amount before you have to pay any tax.
CGT Rates
The rate you pay depends on your total taxable income.
- Basic Rate Taxpayers: 10% on most assets (18% on residential property).
- Higher/Additional Rate Taxpayers: 20% on most assets (24% on residential property).
What do you pay it on?
- Most personal possessions worth £6,000 or more, apart from your car.
- Property that isn’t your main home.
- Your main home if you’ve let it out, used it for business, or it’s very large.
- Shares that are not in an ISA or PEP.
- Business assets.
Planning Tip
If you are married or in a civil partnership, you can transfer assets to your partner tax-free. This can allow you to use both of your annual allowances, effectively doubling your tax-free gain to £6,000.