If you sell or dispose of an asset that has increased in value — such as property, shares, or cryptocurrency — you may need to pay Capital Gains Tax (CGT).
CGT is often misunderstood, and errors are common, particularly where multiple assets, reliefs, or reporting deadlines apply. At Vales Tax Return, we help individuals calculate CGT accurately, claim available reliefs, and report gains correctly to HMRC.
What Is Capital Gains Tax (CGT)?
Capital Gains Tax is charged on the profit (“gain”) you make when you sell or dispose of an asset that has increased in value.
The gain is broadly calculated as:
Sale proceeds
minus
Purchase cost
minus
Allowable costs
CGT applies to the gain, not the total sale price.
Assets Commonly Subject to Capital Gains Tax
CGT most commonly applies to:
- Shares and investment funds
- Second homes and buy-to-let properties
- Inherited property (when sold)
- Cryptocurrency
- Business assets
- Art, jewellery, and antiques
- Assets transferred below market value
CGT usually does not apply to the sale of your main residence, subject to conditions.
Capital Gains Tax Rates in the UK
CGT rates depend on:
- Your total taxable income, and
- The type of asset sold
Current CGT Rates
| Asset Type | Basic Rate Taxpayer | Higher / Additional Rate |
| Shares & investments | 10% | 20% |
| Residential property | 18% | 28% |
| Cryptocurrency | 10% | 20% |
| Other chargeable assets | 10% | 20% |
Capital Gains Tax Allowance
The annual CGT allowance is currently £3,000.
- Gains below this amount are tax-free
- Unused allowance cannot be carried forward
- Joint owners each receive their own allowance (up to £6,000 total)
When Do You Have to Pay Capital Gains Tax?
CGT becomes payable when:
- Your total gains exceed the annual allowance
Reporting & Payment Deadlines
- Residential property: Must be reported and paid within 60 days of completion
- Other assets: Reported via your Self Assessment tax return (deadline 31 January)
Missing deadlines can result in penalties and interest.
Assets Exempt from Capital Gains Tax
CGT does not apply to:
- Betting, lottery, or prize winnings
- Premium Bonds
- Government gilts
- Personal possessions under £6,000
- Cars and motorcycles
- Certain life insurance policies
How to Calculate Capital Gains Tax on Shares
Step-by-Step Calculation
- Calculate total sale proceeds
- Deduct purchase price
- Deduct allowable costs, such as:
- Broker fees
- Stamp Duty Reserve Tax
- Legal or valuation costs
- Apply reliefs and allowances
- Apply the correct CGT rate
If the result is negative, this creates a capital loss, which may be offset against future gains.
Special rules apply where:
- Shares were bought at different times
- Shares were acquired via employment schemes
- Corporate actions (mergers, takeovers) occurred
Capital Gains Tax on Employee Shares
Different share schemes have different tax treatments:
Share Incentive Plan (SIP)
- No CGT while shares remain in the plan
- CGT may apply once sold after leaving the scheme
Save As You Earn (SAYE)
- CGT applies when shares are sold
- No CGT when exercising the option itself
Company Share Option Plan (CSOP)
- CGT applies on sale
- No income tax if option price was at market value
Enterprise Management Incentive (EMI)
- Potential eligibility for Business Asset Disposal Relief
- Reduced CGT rate in qualifying cases
Employee share schemes are a common source of reporting errors.
Capital Gains Tax on Property
CGT commonly applies to:
- Buy-to-let properties
- Second homes
- Inherited properties
Reliefs may include:
- Lettings relief (restricted)
- Private Residence Relief (partial)
- Joint ownership planning
Property CGT must be handled carefully due to tight deadlines.
Common CGT Mistakes to Avoid
- Forgetting to report disposals
- Missing the 60-day property deadline
- Failing to claim allowable costs
- Applying the wrong tax rate
- Misunderstanding joint ownership rules
- Incorrect treatment of inherited assets
HMRC penalties for CGT errors can be significant.
How Vales Tax Return Can Help
We provide professional CGT support, including:
Capital Gains Tax calculations- CGT reporting and Self Assessment
- Property and share disposal advice
- Relief and allowance optimisation
- HMRC correspondence and enquiries
We ensure your CGT position is accurate, compliant, and tax-efficient.
Need Help Calculating Capital Gains Tax?
If you’ve sold shares, property, or other assets — or plan to — get expert advice before submitting to HMRC.
Get your Capital Gains Tax calculated correctly Avoid penalties and missed reliefs File your Self Assessment with confidence
Contact Vales Tax Return today.
FAQs
What is a capital gain?
The profit made when selling an asset for more than its purchase cost.
How much CGT can I earn tax-free?
Up to £3,000 per tax year (per individual).
Do I always need to file a tax return for CGT?
Yes, in most cases — especially for property disposals.
What happens if I don’t report CGT?
HMRC can charge penalties, interest, and investigate past years.
