In the dynamic world of UK taxation, Capital Gains Tax (CGT Tax Rates UK) stands out as a critical consideration for individuals and businesses alike. With recent legislative changes and economic shifts, understanding the current CGT rates and their implications is more important than ever. This comprehensive guide aims to demystify the latest developments in CGT for the 2025/26 tax year, providing clarity and actionable insights
The capital gains tax (CGT) is a tax on the profit made when you sell (or “dispose of”) an item whose value has increased. It pertains to:
Property (Unless it is a rental or second house, it is not your primary residence.) Shares & investments (outside ISAs or PEPs).
Business assets (if you’re self-employed or a business owner).
Valuables (art, antiques, jewellery worth £6,000+).
CGT Tax Rates UK (2024/25 Updated Figures)
Your CGT rate depends on two key factors:
- The type of asset you’re selling
- Your income tax band
For standard assets (shares, investments):
- Basic rate taxpayers pay 10%
- Higher/additional rate taxpayers pay 20%
For property (buy-to-lets, second homes):
- Basic rate taxpayers pay 18%
- Taxpayers who pay higher or additional rates pay 24% (increasing from 28% in 2023)
CGT Allowance 2024/25 – Did Yours Shrink?
The tax-free allowance (Annual Exempt Amount) has dropped sharply:
2023/24: £6,000
2024/25: £3,000 (50% cut)
How to Calculate CGT (With Real Example)
Here’s a simple four-step process:
- Take the selling priceand subtract the original purchase price to find your capital gain
- Deduct any allowable costs(like legal fees or improvement costs)
- Subtract your £3,000 tax-free allowance
- Apply the correct CGT ratebased on your income and asset type
Real-life example:
Imagine selling a second home for £300,000 that you bought for £200,000.
- Your gain is £100,000
- After your £3,000 allowance, you have £97,000 taxable
- As a higher-rate taxpayer, you’d pay 24%on this – that’s £23,280 in CGT
5 Legal Ways to Reduce CGT (Most People Don’t Know!)
- Double your allowanceby transferring assets to your spouse tax-free
- Offset lossesfrom previous years against current gains
- Use Business Asset Disposal Reliefto pay just 10% on qualifying business sales
- Invest through an ISAfor completely tax-free growth
- Spread sales over multiple tax yearsto use several years’ allowances
Pro Tip: Eternity Accountants specialises in CGT tax planning—book a consultation to save thousands.
FAQs – CGT Tax Rates UK (Quick Answers)
Do I pay CGT if I sell my main home?
→ Usually no (Principal Private Residence Relief applies).
What if I inherit an asset?
→ You pay CGT only on gains after inheritance, not the original value.
How do I report and pay CGT?
→ Via Self Assessment or a property tax return (within 60 days for UK property).
Need Expert Help? Let Eternity Accountants Save You Money
Tax rules keep changing—don’t risk overpaying. At Eternity Accountants, we:
Optimise your CGT liability legally
Handle complex filings (property, shares, business assets)
Use professional tax planning to reduce your stress and save time.
Contact Us Today for a Free Consultation
Remember: Smart tax planning today means more wealth tomorrow
