CasviaHow capital gains tax works
Capital Gains Tax (CGT) is charged on the profit when you sell or dispose of an asset that has gone up in value — shares, second homes, rental properties, and most other investments. You only pay CGT on your chargeable gain: the sale proceeds minus the original cost and allowable expenses such as broker fees, legal fees and Stamp Duty.
Each individual has a £3,000 annual exempt amount for 2026/27. The first £3,000 of gains in a tax year are tax-free; anything above that is taxed at 18% or 24%, depending on how much basic-rate income-tax band you have left.
2026/27 CGT rates
| Rate | When it applies |
|---|---|
| 18% | Gains that fall within your unused basic-rate band |
| 24% | Gains above the basic-rate band (higher / additional rate taxpayers) |
| 18% flat | Business Asset Disposal Relief — qualifying business disposals, £1m lifetime limit |
From 6 April 2026 the same 18% / 24% rates apply to residential property and other assets. The old 10% / 20% rates were replaced from 30 October 2024. GOV.UK — Capital Gains Tax rates and allowances · 2026/27
How much is Capital Gains Tax on shares in the UK?
Shares held outside an ISA or pension can create a taxable capital gain when you sell them for more than their allowable cost. For example, if you sell shares for £20,000 that cost £12,000 and you have £200 of allowable buying and selling costs, the gain is £7,800.
After the £3,000 annual exempt amount, £4,800 would remain taxable. If all of that gain falls within your unused basic-rate band, CGT at 18% would be £864. If it is all taxed at 24%, the CGT would be £1,152. Your actual rate depends on your other taxable income and any other gains or losses in the tax year.
For your own numbers, use the UK Capital Gains Tax Calculator.
How the 18% and 24% rates are decided
Your other taxable income uses up part of your basic-rate band (£37,700 for 2026/27). Any basic-rate band that remains is where your gains are taxed at 18%; gains above that are taxed at 24%. In practice:
| Your taxable income | Chargeable gain | Taxable gain (after £3,000) | CGT due |
|---|---|---|---|
| £0 | £10,000 | £7,000 | £1,260 |
| £25,000 | £20,000 | £17,000 | £3,318 |
| £60,000 | £20,000 | £17,000 | £4,080 |
The middle row is a typical shares sale: £50,000 proceeds minus £30,000 costs gives a £20,000 gain. After the £3,000 allowance, £17,000 is taxable. With £25,000 of income, your basic-rate band has £12,700 left, so £12,700 is taxed at 18% (£2,286) and the remaining £4,300 at 24% (£1,032) — total £3,318.
Your main home is usually exempt
Under Private Residence Relief, selling your main home is normally free of CGT. The tax applies to second homes, buy-to-let properties, shares, funds and other investments. If you sell a UK residential property, you generally need to report the gain and pay CGT within 60 days of completion.
Business Asset Disposal Relief
Qualifying business disposals — such as selling all or part of your business — are taxed at a flat 18% in 2026/27 (up from 14% in 2025/26), subject to a £1m lifetime limit. For example, a £100,000 qualifying gain would be taxed at 18% after the £3,000 allowance: £97,000 × 18% = £17,460.
Frequently asked questions
Is my main home exempt from CGT?
How do losses affect my CGT?
Do I pay CGT on shares inside an ISA?
What counts as an allowable cost?
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