UK CGT Rates 25/26: Complete Guide to Property, Share & Business Tax Calculations

UK CGT rates 25/26 tax year are 18% for basic-rate taxpayers and 24% for higher- or additional-rate taxpayers. This standardises rates across residential property and investment assets, supported by a £3,000 annual exempt amount for individuals and £1,500 for eligible trusts.

Key Takeaways

• Standard UK CGT rates 25/26 for basic rate taxpayers are set at 18% on taxable gains, rising to 24% for those in higher or additional income tax bands.

• The HMRC annual exempt amount for individual tax filers is frozen at £3,000, while eligible trusts receive a maximum allowance of £1,500.

• Business Asset Disposal Relief charges a reduced 14% tax rate on qualifying business disposals up to a £1 million lifetime limit for 2025/26.

• UK residential property sales triggering taxable capital gains must be reported and paid to HMRC within 60 days of legal completion.

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a UK tax charged on the profit made when selling or disposing of an asset that has increased in value.

For the 2025/26 tax year, standard rates are 18% for basic rate taxpayers and 24% for higher rate taxpayers, applying to net profits exceeding the £3,000 annual exempt threshold.

What are the current CGT rates 25/26 in the UK?

CGT rates 25/26 in the UK are set at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers across main assets, including secondary residential property and non-ISA share portfolios.

Personal representatives and trustees pay a flat rate of 24% on standard gains, while carried interest charges stand at 32%.

Standard UK CGT Rates 25/26 Table

The 2025/26 UK tax framework unifies main asset categories under a two-tier tax structure determined by taxpayer status: 18% or 24% for individuals, 24% for trusts, 14% for qualifying business assets, and 32% for carried interest.

Taxpayer Status	Main Assets (Shares, Funds, Property)	Qualifying Business Assets (BADR)	Carried Interest
Basic Rate Taxpayer	18%	14%	32%
Higher / Additional Rate Taxpayer	24%	14%	32%
Trusts & Personal Representatives	24%	14% (If eligible)	32%

Unified Main Rate Structure

Recent UK legislative updates eliminated the separate higher rate for residential property, unifying standard investments and real estate under a single CGT rate model of 18% for basic rate taxpayers and 24% for higher rate taxpayers.

Prior policy maintained a clear separation between standard investments and UK residential property. Recent legislative updates unified these categories under a streamlined two-tier framework.

Whether disposing of a buy-to-let house, a commercial unit, or unquoted shares, the taxable gain above your personal exempt threshold is subject to the exact same rate band.

What threshold do you have to pay Capital Gains Tax?

You must pay Capital Gains Tax when your overall net gains in a tax year exceed the statutory CGT rates 25/26 threshold, known as the Annual Exempt Amount.

For the 2025/26 tax year, the tax-free allowance is set at £3,000 for individuals, personal representatives, and individual members of a partnership. For most settlements held by trustees, the exempt allowance is £1,500.

• Individual Annual Exempt Amount: £3,000
• Trustee Annual Exempt Amount: £1,500

Spouses and civil partners maintain independent annual allowances. Because assets can be transferred between spouses on a no gain, no loss basis, a couple can effectively shelter up to £6,000 of gains in the 2025/26 tax year by structuring asset ownership jointly prior to disposal.

Looking ahead to the CGT allowance 2026/27 horizon, government tax policy maintains this £3,000 base threshold, emphasizing the necessity of annual allowance harvesting.

How do Income Tax bands determine your CGT rate?

Your CGT rate (18% or 24%) is determined by adding your net taxable gains to your total annual taxable income; if the combined total falls within the £50,270 basic rate threshold, you pay 18%, and any excess is taxed at 24%.

Calculating your position relative to the Basic Rate Band

To calculate your CGT band, add your taxable gains (minus the £3,000 allowance and registered losses) to your net taxable income; any portion falling under £50,270 is taxed at 18%, while gains above £50,270 are taxed at 24%.

A taxpayer earning £35,000 per year has £15,270 of unused basic rate band (£50,270 minus £35,000). If they realize a net taxable gain of £20,000 (after the £3,000 allowance), the first £15,270 is taxed at 18%, and the remaining £4,730 is taxed at 24%.

How do you calculate Capital Gains Tax on property in the UK?

Calculating Capital Gains Tax on UK property involves deducting your original acquisition costs, allowable capital improvements, legal expenses, and estate agent fees from the final sales price, then applying the £3,000 annual exempt amount to the net figure.

Step-by-Step Property CGT Calculation Process

1. Establish the Disposal Value: Take the gross sale price or market value of the property at the time of transfer.

2. Deduct Deductible Purchase Costs: Subtract the original purchase price, stamp duty paid at purchase, legal fees, and surveyor costs.

3. Subtract Capital Improvement Expenditure: Deduct costs for structural enhancements (e.g., extensions or loft conversions). Normal maintenance or redecoration costs cannot be claimed.

4. Subtract Disposal Expenses: Deduct estate agent commission, legal conveyance fees, and marketing costs incurred during the sale.

5. Deduct Private Residence Relief (PPR): Subtract any tax-exempt proportions if the property served as your main home during the ownership period.

6. Apply Capital Losses: Offset allowable capital losses brought forward from previous tax years registered with HMRC.

7. Deduct the Annual Exempt Amount: Subtract your £3,000 tax-free allowance.

8. Apply the 18% or 24% Tax Rate: Multiply the remaining gain by 18% or 24% based on your available basic rate income tax capacity.

The 6-year rule for capital gains tax on property

The 6-year rule applies under Private Residence Relief when a property that was once your primary residence is temporarily let out.

If you move out of your main home and rent it to tenants, HMRC guidelines allow you to treat that property as your main residence for up to 6 years for CGT purposes, provided you do not nominate another property as your primary residence during that same period.

HMRC Property Compliance & Reporting Deadline

Taxable disposals of UK residential property must be reported to HMRC and the estimated Capital Gains Tax paid using the online UK Property Tax account within 60 days of legal completion to avoid penalties.

Any taxable disposal of UK residential property by a UK resident must be reported to HMRC using the online UK Property Tax account, and the estimated tax paid within 60 days of completion.

Failure to meet this 60-day window triggers automatic late-filing penalties and statutory interest charges.

How much is Capital Gains Tax on shares and investments?

Selling shares, mutual funds, or cryptoassets outside an ISA or pension incurs Capital Gains Tax at 18% (basic rate) or 24% (higher rate) on total net profits exceeding the annual £3,000 tax-free allowance.

HMRC Share Matching Rules

In practice, determining the exact purchase cost of shares requires following HMRC order-of-acquisition rules to prevent artificial tax maneuvering:

• Same-Day Rule: Shares of the same class acquired on the same calendar day as the disposal are matched first.

• 30-Day Bed & Breakfasting Rule: Shares repurchased within 30 days following a disposal are matched against the sold assets.

• Section 104 Holding: All remaining shares of the same company are pooled into a single consolidated holding with an average weighted cost basis.

What is the Business Asset Disposal Relief rate for 2025/26?

Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief, offers a reduced CGT rate for qualifying business owners, sole traders, and employees holding shares in trading companies.

• 2024/25 BADR Rate: 10%
• 2025/26 BADR Rate: 14%
• 2026/27 BADR Rate: 18%
• Lifetime Limit: £1,000,000

For the 2025/26 tax year, the BADR tax rate is 14%. This reflects a statutory transition toward the standard 18% basic rate scheduled for the 2026/27 financial year. The lifetime threshold of qualifying gains remains capped at £1,000,000 per individual.

BADR Qualifying Metrics & Eligibility Criteria

To qualify for the 14% BADR rate, individuals must satisfy strict HMRC metrics including a 24-month minimum ownership period, a 5% shareholding threshold, and officer or employment status within a trading company.

Qualifying Metric	Criteria Required for BADR
Minimum Ownership Period	Assets or shares must be held for at least 24 consecutive months before disposal.
Shareholding Threshold	Must hold at least 5% of voting rights and nominal share capital in a trading company.
Employment Requirement	Must be an officer, director, or employee of the company or group.
Sole Trader / Partnership	Must dispose of all or part of a business trading for at least two years.

When reviewing decisions around business exits, business owners must account for this 14% rate when scheduling share redemptions or company sales during the 2025/26 tax year.

How to avoid Capital Gains Tax in the UK legally?

You can legally minimize or avoid UK Capital Gains Tax by utilizing ISA exemptions, transferring assets to a spouse, harvesting the £3,000 allowance, registering allowable losses, making pension contributions, and using Enterprise Investment Schemes (EIS).

While tax evasion is illegal, HMRC provides structured statutory frameworks and allowances to minimize or eliminate your overall Capital Gains Tax liability.

• Maximize ISA Contributions: Investments held inside Stocks & Shares ISAs, Junior ISAs, and Lifetime ISAs are completely exempt from Capital Gains Tax upon disposal or withdrawal.

• Utilize Inter-Spousal Transfers: Transferring assets to a spouse or civil partner triggers no tax. This doubles the household exemption to £6,000 and allows gains to be realized by the partner in a lower Income Tax bracket.

• Register Allowable Capital Losses: Loss-making disposals must be formally claimed on your HMRC Self-Assessment tax return within four years of the tax year end. These losses offset taxable gains pound-for-pound down to the £3,000 limit.

• Pension Contributions (SIPP): Making personal pension contributions reduces your Adjusted Net Income, effectively expanding your basic rate tax band capacity so that more of your capital gains fall under the lower 18% rate rather than 24%.

• Venture Capital Schemes: Reinvesting gains into eligible Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) shares can defer or eliminate capital gains obligations.

Conclusion

As of 2026, managing Capital Gains Tax requires proactive review due to the unified 18% and 24% rates and the lower £3,000 annual exemption.

Taxpayers planning property, share, or business asset sales should calculate potential liabilities ahead of completion to optimize available basic rate tax bands, offset historical capital losses, and ensure full compliance with HMRC’s 60-day property reporting mandate.

Disclaimer: This article is for informational purposes only and does not constitute formal financial, legal, or professional tax advice; please consult a qualified UK tax advisor or HMRC directly regarding your specific circumstances.

FAQ

What is the capital gains tax rate for FY 25 26?

The standard UK CGT rates for FY 2025/26 are 18% for basic rate taxpayers and 24% for higher or additional rate taxpayers across all main asset categories, including property and shares.

How is CGT calculated?

CGT is calculated by deducting your allowable purchase, improvement, and disposal costs from the asset’s gross sale price, subtracting registered capital losses and your £3,000 exempt allowance, then applying the 18% or 24% tax rate.

How does HMRC check capital gains?

HMRC monitors capital gains using automated data feeds from the UK Land Registry, banking networks, global crypto exchanges via international tax sharing agreements, and merchant transaction records matched against Self-Assessment filings.

Do I pay 18% or 28% CGT?

No, you do not pay 28% CGT. The former 28% higher rate on residential property was reduced to 24%, meaning higher rate taxpayers now pay either 18% or 24% across both residential real estate and standard investment assets.

Is capital gains tax 20% or 24%?

Yes, the main higher rate is 24%. The previous 20% rate for non-property assets was brought into line with residential property rates, establishing 24% as the standard higher and additional rate for 2025/26.

What is the 6-year rule for capital gains tax?

The 6-year rule allows you to rent out your former main residence for up to six years without losing your Private Residence Relief exemption, provided no other property is designated as your main residence.

What assets are subject to CGT?

CGT applies to real estate, second homes, buy-to-let properties, non-ISA stocks, business assets, cryptoassets, foreign currency, and personal possessions (chattels) valued over £6,000, excluding private cars and main homes.

How do I calculate my capital gains?

Calculate gains by taking the sale price, subtracting allowable original purchase expenses and sales fees, deducting your £3,000 tax-free exemption, and multiplying the net sum by your applicable 18% or 24% tax rate.