Selling a property, van, or investment? Work out the CGT before you sign.
Capital gains tax (CGT) is charged on the profit when you sell (or dispose of) an asset that has increased in value. You pay CGT on the gain — the difference between what you paid for the asset and what you sold it for, minus allowable costs (legal fees, improvement costs, selling costs). Everyone gets an annual exempt amount (£3,000 for 2026/27) — gains below this are tax-free.
From 30 October 2024, the rates are 18% for basic-rate taxpayers and 24% for higher/additional-rate taxpayers on all asset types. Previously, non-residential assets were taxed at lower rates (10%/20%), but these were equalised with residential rates in the Autumn Budget 2024. Your CGT rate depends on your total income plus the gain — if the gain pushes you into the higher-rate band, the excess is taxed at 24%.
Residential property disposals must be reported to HMRC within 60 days of completion, and any CGT due must be paid within that period — not at the end of the tax year. Your main home (principal private residence) is exempt from CGT under Private Residence Relief. Only additional properties, buy-to-lets, and inherited properties are liable.
Use your annual exempt amount (£3,000). Deduct all allowable costs — solicitor fees, estate agent fees, stamp duty on purchase, improvement costs (but not maintenance). Transfer assets to your spouse before selling to use their exempt amount too. Business Asset Disposal Relief (formerly Entrepreneurs' Relief) gives a 10% rate on qualifying business disposals up to a £1 million lifetime limit.
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