How to Calculate and Pay Capital Gains Tax in the UK

Capital Gains Tax (CGT) is a tax on the profit when you sell or otherwise dispose of an asset that has increased in value. You work out your gain, deduct your tax-free allowance, apply the right rate, then report and pay what you owe.

• Your taxable income figure, so you can work out which rate band your gain falls into
• Your tax-free allowance for the year: £3,000 for 2026 to 2027
• A Capital Gains Tax on UK property account if you are reporting a residential property sale

1. Work out whether you have disposed of an asset. Disposing includes selling it, giving it away as a gift, transferring it to someone else, swapping it for something else, or getting compensation for it, such as an insurance payout if it has been lost or destroyed.
2. Work out your gain. Take the sale value and subtract the purchase cost and your allowable expenses, such as improvements, legal fees and professional costs. For example, if you bought a painting for £5,000 and sold it for £25,000, your gain is £20,000.
3. Deduct your tax-free allowance from your total taxable gains. For the 2026 to 2027 tax year the allowance is £3,000.
4. Work out your taxable income. This is your income minus your Personal Allowance and any other Income Tax reliefs you are entitled to.
5. Add the amount left after the allowance to your taxable income. If the combined amount is within the basic Income Tax band, you pay 18% on gains made from 6 April 2026. For any amount above the basic Income Tax band, you pay 24%. The basic rate band for 2026 to 2027 is £37,700.
6. If you are a higher or additional rate taxpayer, you pay 24% on your gains from 6 April 2026.
7. If your gains would be charged at more than one rate, use your tax-free allowance against the gains that would be charged at the highest rates.
8. If you sold a UK residential property and have tax to pay, report and pay using a Capital Gains Tax on UK property account.

• You do not usually pay tax when you sell your home, because of private residence relief.
• Some assets are tax-free. You also do not have to pay CGT if all your gains in a year are under your tax-free allowance.
• Trustees or personal representatives of someone who has died pay tax at 24% from 6 April 2026.
• If you qualify for Business Asset Disposal Relief, you pay 18% from 6 April 2026 if you are a sole trader, partnership or trustee and your gains qualify.
• From 6 April 2026 you pay Income Tax and National Insurance contributions on carried interest you receive, rather than CGT.
• If you sold a UK residential property and have tax on gains to pay, you can report and pay using a Capital Gains Tax on UK property account. Reporting and payment for residential property sales must be done within 60 days of completion.

How much can I make before paying Capital Gains Tax? For 2026 to 2027 the tax-free allowance is £3,000. If all your gains in a year are under your allowance, you do not have to pay CGT.

What rate will I pay? From 6 April 2026, higher and additional rate taxpayers pay 24%. Basic rate taxpayers pay 18% where the gain plus taxable income stays within the basic rate band, and 24% on any amount above it.

Do I pay tax on the whole sale amount? No. It is the gain that is taxed, not the amount of money you receive. You take the sale value and subtract the purchase cost and allowable expenses.

Do I have to pay tax when I sell my home? You do not usually pay tax when you sell your home, because of private residence relief.

When do I have to report and pay? For UK residential property, report and pay within 60 days of completion using a Capital Gains Tax on UK property account.