If you've sold property, shares, or other valuable assets in the UK, you may need to file a capital gains tax return in the United Kingdom — and getting it right is essential to avoid penalties and overpayment. Whether you're a seasoned investor or have just sold your first buy-to-let property, this United Kingdom tax filing guide walks you through every step of reporting and paying Capital Gains Tax (CGT) for the 2025/2026 tax year (6 April 2025 to 5 April 2026).
Capital Gains Tax can feel complex, but understanding the rules, rates, and reporting requirements puts you in control. In this article, we'll cover who needs to file, the current tax rates and allowances, how to calculate your gain, the exact steps to file with HMRC, and the most common mistakes to avoid.
What Is Capital Gains Tax in the United Kingdom?
Capital Gains Tax (CGT) is a tax on the profit (or "gain") you make when you sell, give away, or otherwise dispose of an asset that has increased in value. It's the gain that is taxed, not the total amount of money you receive.
CGT applies to a wide range of assets, including:
- Residential property (that is not your main home)
- Shares and investments (outside of an ISA or pension)
- Business assets
- Personal possessions worth more than £6,000 (excluding cars)
- Cryptocurrency
Assets Exempt from CGT
Not everything you sell is subject to CGT. Key exemptions include:
- Your main home (principal private residence relief)
- Assets held within an ISA or pension
- UK government gilts and premium bonds
- Cars
- Gains below the Annual Exempt Amount
- Assets transferred between spouses or civil partners
Understanding these exemptions is the first step in determining whether you actually need to file a capital gains tax return in the United Kingdom.
Capital Gains Tax Rates and Allowances for 2025/2026
For the 2025/2026 tax year, the key CGT figures you need to know are as follows:
Annual Exempt Amount (AEA)
The Annual Exempt Amount for 2025/2026 is £3,000 for individuals and £1,500 for most trusts. This means the first £3,000 of your total taxable gains in the tax year is tax-free. Any gains above this threshold are subject to CGT.
Note: The AEA was reduced from £6,000 in 2023/2024 to £3,000 from 2024/2025 onwards, so if you haven't filed recently, be aware of this significant change.
CGT Rates for Individuals
CGT rates depend on what type of asset you sold and your total taxable income (which determines whether you're a basic rate or higher/additional rate taxpayer):
| Asset Type | Basic Rate Taxpayer | Higher/Additional Rate Taxpayer |
|---|---|---|
| Residential property | 18% | 24% |
| Other assets (shares, crypto, etc.) | 18% | 24% |
| Business Asset Disposal Relief (BADR) qualifying assets | 14% (2025/2026) | 14% (2025/2026) |
Important change for 2025/2026: From 6 April 2025, the lower rate for non-property assets has increased from 10% to 18%, and the higher rate has increased from 20% to 24%, aligning with the residential property rates. Additionally, the Business Asset Disposal Relief (formerly Entrepreneurs' Relief) rate rises to 14% for the 2025/2026 tax year (it was 10% up to April 2025 and is scheduled to rise to 18% from April 2026). The lifetime limit for BADR remains at £1 million.
To quickly see how much CGT you might owe, use our United Kingdom Capital Gains Tax Calculator.
How to Calculate Your Capital Gain: A Step-by-Step Breakdown
Before you file, you need to calculate your taxable gain. Here's how to do it:
Step 1: Determine the Disposal Proceeds
This is the amount you sold (or the market value of) the asset. If you gave the asset away or sold it below market value to a connected person, HMRC will use the market value instead.
Step 2: Deduct the Allowable Costs
Allowable costs include:
- The original purchase price (or market value at acquisition)
- Buying and selling costs (e.g., solicitor fees, estate agent fees, stamp duty on purchase)
- Improvement costs (money spent enhancing the asset, not maintenance)
Step 3: Apply Any Reliefs
Common reliefs include:
- Private Residence Relief — for periods the property was your main home
- Lettings Relief — in limited circumstances where you let out a property that was once your main home
- Business Asset Disposal Relief (BADR) — for qualifying business disposals
- Investors' Relief — for qualifying shares in unlisted trading companies
- Rollover Relief — for reinvesting proceeds from business assets
Step 4: Deduct Your Annual Exempt Amount
Subtract the £3,000 AEA from your total gains for the year (after losses have been applied).
Step 5: Calculate the Tax Owed
Apply the appropriate rate based on your income tax band and asset type.
Practical Example
Let's say you're a higher rate taxpayer and in August 2025 you sell shares that you originally bought for £20,000. You sell them for £35,000 and pay £500 in broker fees on the sale.
- Disposal proceeds: £35,000
- Less allowable costs: £20,000 (purchase) + £500 (selling costs) = £20,500
- Gain: £35,000 − £20,500 = £14,500
- Less Annual Exempt Amount: £14,500 − £3,000 = £11,500 taxable gain
- CGT owed: £11,500 × 24% = £2,760
You can verify calculations like this instantly with our United Kingdom Capital Gains Tax Calculator.
How to File Your Capital Gains Tax Return in the United Kingdom
The method you use to report CGT depends on what type of asset you disposed of and whether you already file a Self Assessment tax return.
Reporting CGT on UK Residential Property
Since April 2020, if you sell a UK residential property that is not your main home, you must report and pay CGT using HMRC's "Report and pay Capital Gains Tax on UK property" online service. The key rules for 2025/2026:
- Create or sign in to your Government Gateway account at gov.uk
- Use the CGT on UK property service — search for "Report and pay Capital Gains Tax on UK property account" on GOV.UK
- Complete the report with details of the property, purchase and sale prices, costs, and any reliefs
- Submit the report within 60 days of the completion date (the date ownership legally transfers)
- Pay the CGT owed within 60 days of completion
Important: Even if you file a Self Assessment tax return, you must still use this separate service to report property disposals within 60 days. You will then include the same information on your Self Assessment return at year-end (the CGT already paid will be credited).
Reporting CGT on Other Assets (Shares, Crypto, etc.)
For non-property assets, you report CGT via the Self Assessment tax return:
- Register for Self Assessment if you haven't already — you can do this on GOV.UK. If this is your first time, you'll need to register by 5 October following the end of the tax year in which the gain arose.
- Complete the SA100 tax return, ensuring you fill in the Capital Gains Tax summary pages (SA108).
- Provide details of each disposal, including dates, proceeds, costs, and reliefs claimed.
- Submit online by 31 January following the end of the tax year (e.g., gains in 2025/2026 must be reported by 31 January 2027).
- Pay any CGT owed by 31 January 2027.
Do You Need to Report If Your Gains Are Below the AEA?
You do not need to report gains if:
- Your total gains are below the £3,000 Annual Exempt Amount, AND
- You don't already file Self Assessment, AND
- The disposal was not UK residential property requiring a 60-day report
However, you must report if:
- The total disposal proceeds exceed 4 × the AEA (i.e., £12,000 for 2025/2026), even if there's no tax to pay
- You want to claim an allowable loss
- You already file a Self Assessment return (you should include all disposals)
Non-Residents Filing CGT in the United Kingdom
If you're a non-UK resident, you are still liable to CGT on:
- Disposals of UK residential property
- Disposals of UK commercial property (from April 2019)
- Disposals of interests in UK property-rich entities
Non-residents must use the 60-day UK property reporting service for property disposals, just like residents. They may also need to file a Non-Resident Capital Gains Tax (NRCGT) return.
Double Taxation Agreements (DTAs) between the UK and your country of residence may provide relief from being taxed twice on the same gain. The UK has over 130 tax treaties in force — check whether your home country has a DTA with the UK to understand how gains are allocated and whether you can claim a foreign tax credit.
Key Deadlines for the 2025/2026 Tax Year
Missing a deadline can result in penalties and interest charges. Here are the critical dates:
| Action | Deadline |
|---|---|
| Report and pay CGT on UK property | 60 days from completion |
| Register for Self Assessment (new filers) | 5 October 2026 |
| Paper Self Assessment return | 31 October 2026 |
| Online Self Assessment return | 31 January 2027 |
| Pay CGT owed via Self Assessment | 31 January 2027 |
Penalties for Late Filing and Late Payment
- Late property report (60-day): Initial penalty of £100, with further penalties for continued late filing
- Late Self Assessment filing: £100 fixed penalty immediately, rising to daily penalties of £10/day after 3 months, and additional penalties at 6 and 12 months
- Late payment: Interest accrues from the due date, plus a 5% surcharge at 30 days, 6 months, and 12 months late
Common Mistakes to Avoid When Filing Your CGT Return
Even experienced taxpayers make errors. Watch out for these pitfalls:
1. Forgetting the 60-Day Property Reporting Deadline
Many people still don't realise that residential property gains must be reported within 60 days — not at the end of the tax year. This is one of the most common causes of penalties.
2. Not Claiming All Allowable Costs
Make sure you include all legitimate costs, such as stamp duty paid on purchase, solicitor and conveyancing fees, surveyor costs for improvements, and broker fees. Overlooking these increases your taxable gain unnecessarily.
3. Failing to Use Losses Effectively
Capital losses can be offset against gains in the same tax year or carried forward to future years. If you've sold assets at a loss, report them — even if you don't owe tax — to preserve those losses for future use.
4. Incorrectly Applying Share Matching Rules
The UK has specific share identification rules (the "same day" rule, the "bed and breakfast" rule for 30 days, and the Section 104 pool). Using the wrong acquisition cost for shares can lead to incorrect gain calculations.
5. Ignoring the Impact on Your Income Tax Band
Your CGT rate depends on your total taxable income. If part of your basic rate band is unused, a portion of your gains may be taxed at the lower rate. Use our United Kingdom Income Tax Calculator alongside the Capital Gains Tax Calculator to get the full picture.
6. Not Considering Spouse Transfers
Transfers between spouses and civil partners are made on a "no gain, no loss" basis. This can be a legitimate way to utilise both partners' Annual Exempt Amounts and basic rate bands. Ignoring this could mean paying more CGT than necessary.
Frequently Asked Questions
Do I pay Capital Gains Tax on my main home?
Generally, no. Private Residence Relief exempts gains on your principal private residence. However, if you've let part of the property, used it for business, or have extensive grounds, some of the gain may be taxable.
Can I offset capital losses from previous years?
Yes. Unused capital losses can be carried forward indefinitely and offset against future gains. However, you must report the loss to HMRC within 4 years of the end of the tax year in which it arose to preserve it.
What happens if I make a gain but don't file?
HMRC receives data from Land Registry, share registrars, and other sources. If you fail to report a taxable gain, you may face penalties, interest charges, and a compliance investigation. It's always better to file voluntarily.
Is cryptocurrency subject to CGT?
Yes. HMRC treats cryptocurrency as property for CGT purposes. Selling, swapping one crypto for another, and using crypto to pay for goods or services are all disposable events that may trigger a gain or loss.
How does CGT work for non-UK residents selling UK property?
Non-residents must report and pay CGT on UK property disposals using the 60-day reporting service. They may be able to rebase the property value to April 2015 (residential) or April 2019 (commercial) for calculating the gain. A DTA with your home country may provide additional relief.
Conclusion: Key Takeaways for Filing Your Capital Gains Tax Return
Filing your capital gains tax return in the United Kingdom doesn't have to be daunting. Here's a quick summary of what to remember for the 2025/2026 tax year:
- The Annual Exempt Amount is £3,000 — gains above this are taxable.
- CGT rates are now 18% and 24% for most assets, aligned across property and other disposals.
- UK residential property must be reported within 60 days via the dedicated HMRC service.
- Other assets are reported via Self Assessment by 31 January 2027.
- Claim all allowable costs and losses to minimise your tax bill.
- Non-residents are liable on UK property gains and should check relevant double taxation agreements.
- Use our United Kingdom Capital Gains Tax Calculator to estimate your liability before you file.
Staying on top of deadlines and keeping thorough records of purchases, sales, and associated costs is the best way to ensure a smooth and accurate filing process.
This article is for informational purposes only and does not constitute tax advice. Tax laws change frequently; consult a qualified tax professional for advice specific to your situation.